Key points regarding short sales:
**Homeowners who owe more than their homes are worth don't automatically qualify for a short sale.
Here are a few things that will be required to proceed with a short sale. The borrower will be asked to prepare a financial worksheet, a hardship letter, bank statements, paycheck stubs and tax returns.
There is a one page document that your Real Estate Broker can go through with you to determine if you are a candidate.
A homeowner does not need to be in default to consider a short sale. Lenders may suggest a loan modification first. If that is not possible, then the short sale comes in to play.
The biggest mistake homeowners make is waiting until they are 3 month or more behind in mortgage payments. If you are in trouble, call your lender immediately. Over 60% of homeowners who have been foreclosed upon, did not even contact their lender.
You may have heard statistics on short sales that are not encouraging. As time progresses, more lenders are having a shorter turn around time.
A short sale effects your credit score for approximately 2 years and a foreclosure stays with you for 7 years.
Most importantly, call a Real Estate Broker who has experience in negotiating short sales. They will be able to guide you through the process.