Arranging for a California Short Sale

By: Kari Shea

Does this scenario seem familiar? You've lost that high-paying job you thought you had tucked in your pocket; your finances are upside down, you miss a couple mortgage payments and now your home is in pre-foreclosure. You owe more money than the home is worth. You're not sure which direction to turn or what strategy to adopt to escape this difficult situation. You're looking for help from someone who has mastered the art of saving people from real estate peril. You need someone to help you with the details of short sales.

Real estate short sales are a process which basically means selling a piece of property for less than is owed. This enables the seller to sell his house while in pre-foreclosure, enables the lender to at least get a good chunk of their investment back and enables the buyer to procure a beautiful home for a lot less money than usual. Short sales are another way of saying let's make a deal.

The headaches and ominous black clouds of foreclosure are increasingly common in cities across California, but banks do not really want homes to go past pre-foreclosure. Banks are not in the real estate business. It's just too much time, struggle and money for them to go all the way. A good real estate agent guides you through the steps needed to make short sales happen.

Typically, a person will call the lender a half-dozen times or more before contacting the person who is in charge of short sales. Ask for a supervisor so that you deal with someone with the authority to make a decision. Don't let the lackeys give you the run around. Of course, with a great agent, you avoid some of the more common headaches of short sales.

If you choose to use an agent to assist you with a short sale, you'll need to give them the proper authorization. A letter containing your name, the current date, the address of the pre-foreclosure home and the reference number of the loan should suffice. Also include the name and information of your agent so that the lender may contact them. The lender will be far more cooperative and willing to discuss personal information with your agent when they've been given proper authorization from you.

Another letter that you must write is a letter of hardship. You'll need to explain what has happened to cause your upside down situation. Did you lose your job? Were you incapacitated and unable to make ends meet for a while? The letter of hardship is a way to put a human face on a pile of missed payments.

From bank statements to pay stubs, the lender will want to see them all to assess your situation. But don't let their monolithic features intimidate you; lenders are humans just like you or I. Quite likely, especially in California where many homes have been going into the pre-foreclosure, they know someone personally in a situation similar to yours. Turn to an expert and let them ease your fears during the short sales process.

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