If you’re facing a foreclosure, you may have heard that opting for a short sale could help you avoid that process. While that is an option some homeowners consider, it’s crucial to have a thorough understanding of this process before pursuing it. The answers to some frequently asked questions, such as those listed below, can get you started.

4 FAQ About Pursuing a Short Sale

Will your lender consider this as an option?

Typically, your lender wants to work with you to settle your debt. A foreclosure is a last resort that can end up costing the bank more money than they will recoup on the future sale of the property. A short sale allows them to avoid this eventuality, so if this type of sale is the only option available to you, they will consider it.

Will you have to pay closing costs?

Usually, the lender covers all costs associated with the sale of the home, so you wouldn’t be required to pay anything in most cases. The costs associated with reselling the home are considerably lower than those associated with foreclosure, like attorney fees. The purchase agreement will probably state that the lender has final approval of any agreement to sell and that the seller isn’t responsible for paying costs related to the sale. 

How long will it take to approve a purchase offer? 

Even when the home buyer has a real estate attorney of their own, there’s no way to speed up this part of the process. Some lenders require a short sale offer to be submitted to a board for approval, extending the waiting period. Generally, you should receive an answer within two weeks, although the use of new software and online resources can shorten the approval process by several days.

What type of documentation is necessary?

To pursue this option for avoiding a foreclosure, you must show your lender that you’re suffering a financial hardship. This involves gathering your tax returns, paycheck stubs, bank statements, and similar financial documents. You’ll also be expected to submit a hardship letter, which will describe why you can’t make your mortgage payments. The lender will treat these documents as confidential, but they need them to consider whether or not to let you proceed with the sale.

Pursuing a short sale of your home is a complex process that requires the expertise of skilled real estate attorneys like the team at Bernardini Law P.C. This firm in North Andover, MA, specializes in real estate law, and they know how to negotiate with lenders. Their team is committed to helping you navigate real estate law to achieve the most favorable outcomes possible. To schedule a consultation, visit their website or call (978) 794-5525.