What is a Short Sale?

To "short sale" your home means to sell it for less than what is owed to the lender. In other words to sell your home short of what is owed. It is an alternative to foreclosure, but is less traumatic to your credit than a foreclosure. If you are struggling to make mortgage payments you should list your home with a reputable Realtor as soon as possible. If your Realtor advises you that your home is likely to sell for less than what you owe contact your lender's "workout" department immediately. Ask for the loss and mitigation department and have a short sale package mailed to you.

• Authorize your Realtor in writing to work and to negotiate directly with your lender.
• Make sure your Realtor includes a cover letter that explains the buyers qualifications. If the buyer is asking for concessions explain why.
• Write a hardship letter. Present your finances in the worst light. Explain any illness, death in the family, loss of job, etc.
• Make sure the package is thorough! The lender will want to see: the offer to purchase your home, your hardship letter, a balance sheet with your monthly income and expenses, a net sheet, 2 months worth of pay stubs, 2 months worth of bank statements, 2 years tax returns, etc.