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Q.If I try to do a short sale, what is the process?
A.First, read all you can about the foreclosure laws in your state and if you are unsure about something seek clarification from an attorney. Second, know that your lender will not negotiate with you until you are in default. Third, once you are in default contact your lender's loss and mitigation department, ask to speak to the person in charge of your loan, ask that person to send you their short sale information, and keep in touch with that person at least once a week. Forth, list your property on the MLS yourself with the term "Short Sale" and prepare all of the paperwork required for your lender's short sale package (e.g. tax returns, bank statements, income and expense forms, hardship statement, etc.). Fifth, if you find a willing buyer that is pre-qualified and willing to sign a purchase-sale agreement, either you or an attorney should prepare the purchase-sale agreement and send it to your contact at the lender's office, and begin negotiations. You personally should negotiate with the lender, or hire an attorney, but do NOT let a realtor negotiate on your behalf. Sixth, your lender will have your property appraised but do not expect any real response from your lender until you are six weeks before a court foreclosure hearing. Understand that unless the lender receives an offer fairly close to the property's fair market value, the lender will likely let the property go through the foreclosure process because the lender has insurance to cover its own losses.
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