Stopping foreclosure can be done through short sale. However, this is not an easy process. Homeowners need to be qualified by the bank before it can be granted. For someone who is on the verge of foreclosure, certain things need to be proved so that banks will grant such request. This is why it is long and a hard process because banks can be thorough in their evaluation.
However, this does not mean that closing short sale is not possible. There are certain things that need to be presented to the bank. They will study these materials before granting your request to prove your inability to pay. Here are some of the documents needed:
- The cover letter- This is where you state your request for short sale and why you need to undergo such process.
- Hardship Letters- This document explains why you are not able to make the payment required to pay-off the loan.
- Authorization Letter- this document allows the lender to talk to the people who have interest on your loan.
- Estimations- This should reflect the expected net amount your will receive after selling your property. The cost of selling should also be properly disclosed.
- Financial report about income and assets- Any asset and income should be disclosed properly and you must not falsify any of these for the sake of approval.
- Bank Statements- To reflect any cash outflows and inflows from your savings and checking accounts.
- Report containing low comparable sales- This proves that your house value is dropping.
- Listing agreement- This proves that you have worked with a real estate agent and agreed to put it up for open listing, exclusive agency listing or exclusive right-to-sell listing.
- Sale contract or purchase agreement- This proves that you already have a buyer. In here, the offer made by the buyer should be disclosed.
Submitting these things is not enough to close the deal. You have to go an extra mile to let the lender understand how much you badly need the short sale. Here are additional tips to secure the closing:
- When you talk to the short sale person-in charge, you need to be nice and humble.
- Be open and give factual answers. Speak only of the truth.
- Make your short sale offer and other documents (especially the comparable market analysis) thorough so that they will not have further questions that could delay the approval.
- Take care of your buyer and make sure they will not back out. Be open to them and let them know about the agreements concerning the closing cost.
- Ensure to give the saddest statements in your letter of hardship. Make sure the reason falls on what is defined as hardship namely: divorce, death, serious illness and bankruptcy.
- Be ready with photos and other details to back up why your house has fallen below the market value.
Closing a short sale is a difficult process. However, if you possess good convincing skills, the whole process becomes easy.