How to Do a Short Sale On a Home

In the 2008/2009 real estate climate, many people are trying to get out of houses they can't afford, but finding that they cannot get enough money to cover the loan. However, there is a standard practice in the mortgage industry called a "Short Sale", which allows you to tell the house for less than what you owe on it, and then, if it is done properly, not owe the difference.

	Put the house on the market and price it aggressively to attract buyers. Set the price based on the value of the home, regardless of the amount of your mortgage. The buyer does not care how big your mortgage is, so setting the price too high will scare off buyers.
	Get your real estate agent to do some market research called a CMA (comparative market analysis) to find out what's been selling in your area, after how long, and for how much.
	If you get an offer that seems reasonable, take the offer and the CMA to the bank or financial institution that services your mortgage. Tell them that if they foreclose on the house that they will not get a better sales price, and they will probably get a worse price since buyers want an extra discount on foreclosed homes. Tell them you are interested in doing a short sale.
	If the bank accepts the offer, make sure that the short sale is "without recourse" and constitutes "settlement in full". If it does not, then the bank will eventually sue you for the different between the loan and the sale price (and they will win since you owe the money.) If it is without recourse, then the bank is agreeing to forgive the difference in debt.

• Always consult with your attorney and real estate agent concerning the details of your contract, your market area, and laws in your state governing foreclosures.