How to survive a short sale

Short sale sign on home

Unfortunately, the real estate market has still not returned to what it once was. If you are unable to sell your home for what you owe on your mortgage and are considering a short sale, follow these six steps to make the process as painless as possible.

Saving your sanity during a short sale

No matter where you are living these days, chances are, if you are trying to sell your home it's not nearly as easy as it would have been 10 years ago. Homes aren't flying off the market like they once were and many families, in an effort to avoid foreclosure, are attempting to short sell their homes.

Here are a few tips to help you hang in there for the long haul:

Investigate the process

"In order to qualify for a short sale you must have a hardship that has caused you to be unable to meet the terms of your loan, such as job loss, divorce, medical issues or relocation," says Avery Piantedosi, short sale specialist with Max Broock Realtors. She also recommends contacting an accountant regarding tax implications "although through 2012 most homeowners qualify for the Mortgage Forgiveness Debt Relief Act, anyone considering a short sale should contact a CPA to discuss their tax situation."

Find a knowledgeable Realtor

This may be the most important piece to a successful short sale. Find a Realtor who is an expert at short sales. A Realtor who says they have completed a short sale before may not be sufficiently qualified. Make sure they have more than one under their real estate belt, find out how involved they plan to be in the process and how long it took their previous short sales to complete.

How to choose a Realtor >>

Be flexible

Tip: Want to make the most out of every showing? Try these tips on staging your home for a quick sale.

As with any type of sale, be as open as possible to letting people view your home. Since your home will be selling at a reduced rate you will, hopefully, get a lot of showings in a short amount of time. Think of it as short-term sacrifice for long-term gain. A few weeks of people coming in and out could result in quite a few offers, and the closer they are able to come to what you owe on your home the more likely the bank is to accept the offer.

Save everything

In order to qualify for a short sale you will have to submit a great deal of paperwork to your lender. "Submit paperwork the lender asks for as soon as possible." Pientadosi says. Oftentimes, you will have to submit and resubmit and resubmit again. Save copies of everything you submit to your Realtor or lender and date everything with the dates you submitted.

Follow up

Even if you have a fabulous Realtor who assures you he or she is communicating with your bank regularly, take the process into your own hands and talk with your lender often as well. If you have ever called an 800 number for your bank, you know just how many different people and departments there are. The phrase "the squeaky wheel gets the grease" is definitely true for a short sale. The more persistent you are with your lender, the more likely you are to get answers and move forward in the process.

Bring your patience

Tip: Is the deal finally complete? Following this moving planning guide to make your move as seamless as possible.

The short sale process is not remotely "short." If you know this from the beginning, the waiting is easier to handle. You may get asked for paperwork again and again.

"Be patient!" says Piantedosi. "Realize short sales, once the offer is submitted to the lender, can take two to six months to get approved so let the process happen."

The bank may deny an offer and then accept it the next day. It's a rollercoaster ride, a really long rollercoaster. But eventually, when all is signed, sealed and the keys are handed over, the process will be well worth it.

More on financial struggles

Can I avoid a foreclosure?
Short sale or walk away? Why women are falling victims to the housing market.
Talking to kids about financial struggles

Tags: foreclosure real estate market

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Comments on "How to survive a short sale"

Tina September 10, 2012 | 1:44 PM

Finding a great realtor is key. You need to have someone with experience and someone that will fight for you. Our realtor was amazing. She closed 40 short sales the year before we bought our short sale. It only took 4 months to close, which is really good for a short sale. I know for a fact if it weren't for our realtor we would not have this home.

Carri June 07, 2012 | 3:28 PM

My husband and I short sold our last house not because of money issues, but because we were losing more on our house per month than we were paying. If we planned on staying there forever, it wouldn't have mattered, but we weren't willing to wait for our house to increase in value. Our short sale went extremely smooth because we hired a lawyer to deal with the bank (we were able to short sell our house without ever missing payments, so our credit score dipped a bit but then came back up) and we used a realtor who specialized in them. Our house received three offers within 12 hours of listing and we were out of it and into our new home two months later.

Steph June 06, 2012 | 2:34 PM

I'm glad I saw this so I can grasp a better understanding of the process my family is trying to prepare for. Since my brother and I have left for college, my parents have come to realization with the mortgage and size of the house, they should no longer feel the need to hold onto the same house we've been living in the last 12 years. I barely remember the first time when we sold our first house, but I distinctly remember how crucial it was to find a notable and loyal realtor. We have a house filled with animals. Therefore, by having two young children at the time as well as pets, the house wasn't always the cleanest. We were having to be patient with someone buying our house, but there were times the relator would bring people over to view our home with kids clothes lying around, dirty dishes and cat poop left on the floor. Not only were we furious with the realtor, but embarrassed by the people looking through our house. That being said, we have learned to be as clean and open for viewing as much as possible AND make sure you have a reliable realtor who knows what they're doing!!

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