How to Avoid the Pitfalls of a Short Sale - Page 2 of 2
Money

How to Avoid the Pitfalls of a Short Sale

Tips for Sellers

Don’t assume you need a short sale. Talk to a real estate agent and find out what your home is worth. “If you have enough equity, try to sell your home on the open market,” Riles advises.

Open the lines of communication early.
Once you know you need to pursue a short sale, be sure you are communicating with your lender on a regular basis. “This can mean the difference between foreclosure and getting your sale done,” Riles says.

Have your documentation ready. You will need several documents including tax returns, pay stubs, bank statements, and other important forms, and they must have the proper signatures.

Be prepared for last-minute changes at closing. “Usually the closing attorney is seeking approvals from the seller’s lender, the buyer’s lender, and of course the parties in the deal,” says Wood. “With so many people to appease, oftentimes the figures will change frequently as you approach closing.”

Resources

National Association of Realtors’ Field Guide to Short Sales

HUD Guide to Avoiding Foreclosure

Making Home Affordable Program

Freddie Mac Guide to Avoid Foreclosure

WEALTH FOR LIFE PRINCIPLES

1. I Will Live Within My Means
2. I Will Maximize My Income Potential Through Education and Training
3. I Will Effectively Manage My Budget, Credit, Debt, and Tax Obligations
4. I Will Save At Least 10% of My Income
5. I Will Use Homeownership as a Foundation For Building Wealth
6. I Will Devise An Investment Plan For My Retirement Needs And Childrens’ Education
7. I Will Ensure That My Entire Family Adheres To Sensible Money Management Principles
8. I Will Support the Creation and Growth of Minority-Owned Businesses
9. I Will Guarantee My Wealth Is Passed On To Future Generations Through Proper Insurance And Estate Planning

10. I Will Strengthen My Community Through Philanthropy

For more on short sales and buying distressed properties, check out the September 2009 issue of Black Enterprise magazine.


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