Boston Estate Planning and Probate Lawyer & Attorney : Gosselin & Associates Law Firm : Serving Boston, Winchester, Hingham, Wellesley, Manchester

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Gosselin Law assists homeowners in Massachusetts and New Hampshire negotiate effective short sale, deed in lieu and other foreclosure alternatives. Call us toll free at 877-325-6746 for a no fee consultation. No fee is due unless homeowners complete a short sale. Here are some tips to help homeowners facing foreclosures. Note that we only provide our services in Massachusetts and New Hampshire.

What is a Short Sale

• When a lender accepts a discount on a mortgage to avoid a foreclosure or bankruptcy

Why a Lender Would Take a Discount

• They do not like excess inventory or bad loans on their books
• Loss mitigators have incentive to clear up defaulted loans - short sales help do that
• Lenders know they can lose more money if a home goes to auction

Lender "Short Sale" Factors

• Whether the seller deserves a break due to: financial hardship caused by unforeseen circumstances (layoffs, divorce, illness, etc.)
• Whether it would be cheaper to repossess the home, fix and sell
• How many other properties the lender has in default
• If co-signers are on the loan and can help pay the mortgage balance

The Short Sale Process

• Acquire a professional (such as a real estate attorney) with short sale experience
• Contact the lenders 'loss mitigation department' to discuss the possibility of a short sale and determine the lenders process for completing the sale. This sometimes involves acquiring a 'Short Sale' or 'workout' packet
• Seller must issue a signed 'Release' or 'Authorization to Release Information' to authorize the release of personal information about the loan and the property for the buyer or escrow agency
• Lender will review the settlement statement indicating: sale price, loan balance, expenses, commissions and fees associated with closing the sale
• Seller must complete a 'hardship letter' explaining the reason for wanting a short sale. The letter should include all information regarding the financial circumstances of the seller along with bank statements, investment account information, pay stubs and other necessary financial information
• The lender will connect with the broker to provide a price opinion based on the condition of the home, market value, maintenance costs, etc.
• The lender reviews the purchase agreement and real estate commissions and weighs them against the cost of repossessing the home to sell or auction
• If the lender finds the situation works in their favor, the short sale will proceed with the terms negotiated in the purchase and sale agreement.

Short Sale Mistakes to Avoid

• Don't low-ball your offer. Lenders are trying to minimize loss and have a good sense of property values so make your offer as tempting as you can while staying inside your profit guidelines
• Have a knowledgeable short sales professional on your side. Lenders are busy and do not have time to explain the process so make sure you know what you are doing, or find someone (like a real estate attorney or a broker with short sale experience) who does
• Don't assume each lenders short sale process is the same. Each lender has different documents, requirements and regulations so don't foul up by making assumptions
• The fewer loans on the property - the smoother the short sale process. Avoid complicating an already complex process by  having a good handle on what's owed on the home.

Why Short Sale Knowledge is Important for Brokers and Real Estate Agents

• You can recognize  the opportunity to sell a home and receive commission on a home that would otherwise be repossessed by the lender or auctioned
• To develop a favorable reputation among potential buyers (who stand to purchase a discounted home with a short sale) and among sellers (who will no longer go into foreclosure or declare bankruptcy)