Previously I’ve talked about what a short sale is, how to start the process on a short sale and how to get the information you need.

Now I’m going to get specific about your qualifications for a short sale. You need an agent that understands exactly what it will take to get a short sale approved and if you’re even a candidate for it.

The 1st qualification that you’ll have to meet is:

1. A Hardship – I know this is difficult to discuss and it’s a hard thing to go through but no bank out there is going to approve a short sale unless you have a hardship.

The 1st part of any hardship is of course that:

• you owe more than the home is worth
• you’re in a situation where you’re getting behind on your payments
• you’re about to get behind
• you’ve received a foreclosure notice

When banks look at hardships they’re looking for certain situations and circumstances that were beyond your control that put you in the situation. Of course they understand that you went and borrowed more money than the home is worth today. But back then, no one knew that that was going to happen. They didn’t know. They were anxious to lend you money and they understand that.

What is  a hardship? Here’s a few examples. (You’ll be asked to put this in writing and they will verify it when you apply for a short sale.)  Maybe you’ve lost your job and that was your primary source of income in order to make your mortgage payments. Maybe there’s been a family illness that was unexpected and is just draining you financially and obviously a lot more important to take care of the family than the mortgage payment. Other hardships can be discussed and explored on a case by case situation. But those would be the biggest things for sure.

2. The 2nd thing they’re going to do is ask you for a complete financial statement -

• your total income
• your assets
• your savings
• what your monthly outflow is in the way of bills

You’re also going to have to demonstrate that you’re out of deficit if you’re paying your mortgage. They’re going to look at that pretty closely. They’re trying to determine that you’re insolvent due to the hardship, thus qualify for them taking a lot less money than you owe them in order to sell your home. Those are certainly the biggest things. Those are the things you need to be prepared for and the toughest things to deal with.

I have a 9-page package of information that I will provide you for free and upfront if you’re a short sale candidate after our initial discussion. This package includes all the forms and documents that you’ll have to fill out so that my title company can forward that information to your lender and start the process while we’re listing your home and trying to get an offer on it. I have that available. It’s free information. I just need an opportunity to talk with you to see if you’re a real candidate for a short sale.

Next time I’ll discuss how to price your home on a short sale situation. It is also very important in getting an offer and getting the bank to approve the sale.

If you’d like more information, if you’d like that short sale package or just to talk with me, call me at: 303-526-2606 e-mail me:  Sam [at] HomeSam.com or just visit my website: www.HomeSam.com and click on the short sale button.

Until next time