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Understanding Short Sales


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A real estate short sale occurs when a lender agrees to accept less than the full amount due on the foreclosure property. Though it is a type of sale found in the real estate industry, not all lenders will accept short sales. If you are interested in selling your property by way of a short sale, there are a number of points that should be considered:

Seek legal advice from a knowledgeable real estate attorney.

Understand all short sale tax implications.

Seek the advice of a certified public accountant.

If after receiving competent advice, you're still interested in selling your property through a short sale, you are advised to take the following steps:

Contact the lender. It is important that you speak with the person who is charged with making decisions.

Put together a letter giving the lender permission to speak with the interested parties about your loan. Make sure your letter includes:
1. The property address
2. Loan reference number
3. Your legal name
4. The date
5. Your Agent's Name and contact information.

Have an estimated closing statement prepared for you by the closing agent or attorney. The closing statement should include the sales price you expect to receive plus costs of the sale; unpaid loan balances; late fees; outstanding payments still due and any real estate commissions.

Write a letter of hardship explaining how you got into this financial situation and a plea asking the lender to accept less than the full payment. Being honest and forthright about a job loss, severe illness and lengthy hospitalization might endear the lender to help you.

Provide proof of income and assets

Provide bank statements

Have a recent comparative market analysis

Include a purchase agreement and listing agreement

Understand also that not all properties or sellers qualify for short sales.

Written by Regina Rivard, Copyright 2008, All rights reserved.

To find out more about short sales come visit United Settlement Service Affiliates, Inc at today.


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