Why should I consider a San Jose short sale?
If your house is worth less than the current mortgage balance, you are having difficulty making payments and you’ve tried every opportunity to get a loan modification or refinance – a short sale may be your best chance to leave your house without totally devastating financial fallout.
A foreclosure has the added stigma of defaulting on a loan and permanently affecting your credit, so most sellers are eager to keep that from happening.
Would going into foreclosure be easier?
Probably not, for the above reasons. After a homeowner goes into foreclosure, most banks will not approve a home loan until after 7 years have passed and almost all loan applications require you to disclose that you’ve had a foreclosure in the past.
In contrast, short sales typically affect your credit for fewer years and fewer loan applications require you to disclose that you “negotiated a settlement” of a loan in the past. So, if you believe you’ll be able to purchase a home again in the future, a short sale is a better option.
How do I get my San Jose short sale approved?
Start by calling your lender’s 800 number and explain that you’re having difficulty making payments and that you’d like to submit a request for a short sale.
Be prepared to provide your lender the following:
- Signed and dated hardship letter
- Copies of last 60 days pay stubs
- Copies of P&L statements (if you are self-employed)
- Completed financial worksheet - signed and dated
- Copies of last two years tax returns
- Copies of last 60 days bank statements
- Copy of investment account statements
- Copy of Listing Agreement
- Estimated net sheet (Preliminary HUD-1)
- Identification of liens on the property
What is a letter of hardship?
A letter of hardship explains the circumstances of your potential lapse in payments. The more dire you can make your circumstances sound, the better! Lenders are people too, and they can be more sympathetic if they fully understand your situation.
How long does it take to complete a San Jose short sale?
San Jose short sales can take anywhere between 1 week to 6 months. Typically, the time period is dependent on the bank’s process and the quality of the personnel at the bank. Also, the real estate agent you chose to help sell your house is critical. The bank will ask your agent to perform many tasks and fill out volumes of paperwork. If your agent isn’t experienced and makes mistakes or doesn’t follow-up quickly on requests, your short sale will stretch out.
What can delay my short sale?
Many factors can delay a San Jose short sale, but most delays are due to the following: uncooperative banks, inadequate disclosure on the part of the seller, poorly prepared buyer, poor communication between the listing agent and the bank. It’s important to consult a real estate agent before embarking on a short sale situation to ensure every controllable factor is covered.
How do I find a qualified real estate agent for short sales?
The key to smooth short sale is to work with an agent experienced in negotiating short sale listings. The ideal agent:
- Has recently listed and successfully sold short sale properties
- Is honest with you about what it takes to be successful – you’ll have to be brutally honest with the bank about your financial situation and any agent who advises you otherwise is not for you
- Someone you trust and a person you can work with when the situation is stressful
- Ideally, has purchased or negotiated one or more short sales with your lender