| It is no secret that the real estate market has been | | | | cost of selling. A real estate attorney or realtor may |
| a bit bumpy as late. Many homeowners find that the | | | | help you determine what your cost will be. To do |
| home they purchased has declined in value. In addition | | | | this, simply subtract the expenses from the market |
| to this variable rate mortgages have caused many of | | | | value of the home. This will be a negative number. |
| these home owners to be faced with higher house | | | | Now you will have to contact your lender. Explain the |
| payments than they can afford. The property owner | | | | situation to the lender. Tell them you need to |
| may then fall behind in payments and be faced with | | | | conduct a short sale of your real estate. You will |
| foreclosure. | | | | probably be put in contact with someone in the |
| In this unhappy situation a process which is called a | | | | foreclosure department. Make sure you are speaking |
| short sale may be the best option for the home | | | | with someone who has the authority to make |
| owner. What is a short sale? A short sale is when | | | | arrangements with you. The process will differ from |
| the financial obligations on real estate are more than | | | | lender to lender. Some lenders will set an amount |
| the real estate will bring in a sale. The short sale helps | | | | that they will take to settle the loan. Others will not |
| a homeowner avoid foreclosure, rescue their credit | | | | do this, but will need to approve any offer made by |
| rating and escape a stressful situation. | | | | a buyer. |
| The first step in conducting a short sale is to | | | | If you have a realtor marketing your home, bring |
| determine the homes current market value. This | | | | them into the loop as soon as possible. They can help |
| value is what the real estate will sell for, not what | | | | guide you through the short sale process. You will |
| the owner needs to settle obligations. A couple of | | | | need to give the lendor written permission for your |
| methods are used to determine market value. An | | | | realtor to call them and discuss the loan with them. |
| appraisor may be called to do a formal appraisal. Or a | | | | The lendor will have forms and other information the |
| realtor may perform a Competitive Market Analysis | | | | realtor needs to complete the real estate sale. |
| on the home. Either method will determine what the | | | | Once the house is sold, you may want to consult a |
| propery may bring in a sale. Stress the word may. | | | | tax attorney. The short sale of real estate is |
| Next you will need to determine your selling costs. | | | | considered relief of debt by the Internal Revenue |
| These can vary from state to state and locality to | | | | Service and may be considered as income. In short, |
| locality. The total loan liability on the home, liens on | | | | make sure you consult professionals at every step |
| the property, real estate taxes and closing costs are | | | | of the short sale to cover all your obligations and |
| all part of these expenses. If you are using a realtor, | | | | make sure everything is done correctly. |
| the commission will also need to be figured in as a | | | | |