Real NEastate: How do I know the short sale I’m buying will work out?

Q: I just signed an agreement for my home in Millbrook. It is a short sale now. Will it go to settlement? I am so worried I will end up in foreclosure. I don’t know what to do.  

A: Prepare yourself for a long road ahead between signing this agreement and going to settlement, if it happens. Your mortgage lender will need to give you approval to sell your home since you will not be paying back the entire loan. Lenders are not quick to agree many times and this could take a while.  

Since there is no set procedure, or set timeline established by mortgage lenders for this to happen, just be prepared. I know it is a stressful time, but just realize that you don’t have control over your mortgage lender’s short sale process.

Your best use of time is to have items ready your lender may ask you to submit in their “decision process.”   Below is a list of thing to have on-the-ready at all times to help the process along. You may be repeatedly asked for these.

1. Your last two years of Federal Tax Returns

2. Your last two (or three) bank statements

3. Your last two months’ worth of paystubs

Some items your agent, or the person handling your short sale, should also have are:

6. An authorization to speak on your behalf.

7. Your hardship letter

8. The listing contract

9. The signed Agreement of Sale

10. A short sale Addendum

11. An occupancy statement

12. An income and expense form filled out

13. And many other items such as, Arms-Length affidavit, RMA forms, Dodd-Frank, 4506T, and HAFA, to name a few

A short sale is neither short nor easy. But you’ll be better off in the long run then foreclosure if it works out.

Stacey McCarthy is a real estate agent with the McCarthy Group of Keller Williams. Her Real NEastate column appears every Wednesday on NEastPhilly.com. See others hereRead other NEast Philly columns here.

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