Minnesota short sales may not be a pleasant transaction, but neither is giving up home ownership through foreclosure. Foreclosure ruins your credit, strips your dignity and embarrasses your family. When you have difficulty paying for your mortgage and the bank already sent you the first foreclosure notice, you need to immediately think short sale.
When the bank approves of your short sale, they agree on receiving payment that is less than the amount due. This means that they are giving discounted payoffs on delinquent mortgages. Because of such arrangement, not all lenders may approve of short sales, especially if foreclosure is more financially beneficial. In addition, not all properties and sellers are qualified for the sale. Dealing with this kind of real estate requires the right knowledge and understanding so one must ask advice from legal, accountants or short sale agents before deciding on a short sale.
Although lenders may have different requirements and demands when it comes to a short sale transaction, you need to have a basic idea of what they are looking for. Below is the list of things that you would need to negotiate a short sale.
- Name of the person responsible for short sale. Call the department that handles short sale and get the name of the supervisor or the person that is capable of decision-making.
- Authorization letter for disclosure of information. You may need the help of Minnesota short sale agent who will do the hard work on your behalf. Before lenders give the details about your nearly-foreclosed property to the agent, you need to give them permission to discuss the details about the property to your agent. The letter of authorization should contain the property address, loan reference, name of mortgagee (that’s you), date of the letter, agent’s name and contact details.
- Estimated closing statement. This shows the sales price and its related costs, amount of unpaid loan, outstanding payments and all late fees of the property. It is in this part where you need the knowledge of your Minnesota short sale agent or lawyer. When the computation shows that you receive cash at the end, you most likely do not need the short sale.
- Letter of hardship. The more difficult your financial situation, the better. This letter serves as your plea of why your lender should accept payment that is less than the total due. Valid reasons include job loss, death of family members, divorce or severe illness.
- Records of assets and other income. Lenders want proof that you are incapable of paying your debt so they want to know your other assets and income. They need to know if you have saving accounts, stocks, negotiable instruments and properties before they decide to “forgive” your delinquency. They would even require that you explain your unaccountable deposits on your bank statement so they can determine if deposits are still possible or not.
- Comparative market analysis. This can be prepared by your short sale agent as this shows the prices of similar homes that are active on the market, are on pending sales and sold within the past 6 months.
- Copy of the purchase and listing agreement. Lenders need to have a copy of the purchase and listing agreement. It is possible that lenders will not pay certain items like termite inspections and home protection plan or they may renegotiate commissions as opposed to what is written on the agreement.
Now after examining all these things, it is up to your lender to approve your short sale. Once approved, they may or may not reflect the short sale in your credit report.
Tags: Minnesota short sale, Minnesota short sale agent, Minnesota short sales, short sale
