How Does a Short Sale Work?
Colorado Short Sale Attorneys | How does a Short Sale Work?
A short sale is a real estate transaction in which the property is sold for less than what is owed to the lender or bank. Whether or not the lender approves the sale depends on several factors, including the borrower’s home equity, the condition of the local real estate market and whether the lender believes it could recoup more with a foreclosure after a mortgage default.
Short Sale Process
Jeff Corporon, will advise clients about the benefits and disadvantages of a short sale. We also help them understand the process, which includes:
- Listing the home with a broker: Attorney Jeff Corporon owns a real estate brokerage and can list and show short sale properties.
- Proposing the sale to the lender: After receiving a formal offer that appears reasonable in light of the comparable sales in the market, the seller must propose the short sale to the lender.
- Drafting the hardship letter: The lender will usually require a hardship letter that describes why a short sale is necessary. The lender may need to review other documentation of hardship, such as pay stubs and bank statements. The lender will also require a signed purchase agreement from the proposed buyer.
- Obtaining an appraisal: The lender will typically do its own evaluation of the property’s value to ensure that approval or denial of a short sale is based on a professional assessment of the market value of the property.
- Reviewing the proposal: There are numerous reasons a lender may not approve a short sale. Our lawyers can advise clients about the probability of a successful short sale.
- Approving the sale: This may take as long as six months, depending on the lender and market conditions.
Our lawyers can explain the details and help clients obtain and submit the documents required by lenders to approve short sales. In addition, as a real estate broker Jeff Corporon can handle all details of the listing and sale at no cost to you.