A difficult financial situation can arise almost without warning. When it happens, it’s important not to sit back and think the inevitable is on its way. In most cases, a foreclosure is a last resort. Often, lenders would prefer just about any other alternative, as foreclosures are rarely beneficial to them and are often a hassle for everyone involved. One alternative choice is to sell the home through a special circumstances option. It’s not a decision to be made lightly, though, so anyone looking to avoid a foreclosure needs to explore these tips to prepare for short sale negotiations.
Thoroughly Grasp the Entire Process
The first thing to understand is that a short sale is a process that the homeowner must initiate. It begins by writing a solid short sale notice letter. The letter is intended to notify the lender of the homeowner’s intentions. However, the lender ultimately has a say in whether to accept the proposal. As the name suggests, short sales typically result in the home being sold for a price that’s short of its total value.
As such, lenders do tend to lose money in the deal. However, as noted, selling to make the mortgage payments is more beneficial than losing a mortgage altogether in most cases. To ensure lenders understand the value of this point, they will begin negotiations shortly after they approve the letter.
Understand the Requirements for a Short Sale
It’s essential to understand that short sales are strictly an emergency action. As such, it’s not something that can or should be taken lightly. A homeowner must meet reasonable requirements to be approved. These requirements will also be outlined for the lender’s immediate clarity within the initial proposal letter. To qualify, a homeowner must essentially prove that paying for a mortgage, at least at the current rate, is no longer possible. The most common reasons to propose a short sale are job loss, wage loss, cut hours, or even a job relocation.
Determine if Assistance Is Necessary
Winning over a lender on any financial matter is not a task for the average individual. As such, one of the best tips to prepare for short sale negotiations is to consider obtaining professional assistance to ensure the talks go over well. The most immediately accessible individuals are real estate agents with short sale experience. Besides this, attorneys with real estate experience are also effective. Lastly, many third-party professional short sale negotiators are available to assist with the proceedings.