Short sales can help some homeowners dealing with money troubles. For example, if you cannot make your mortgage payments, you might explore a short sale.
In a short sale, the lender agrees to accept less than the full mortgage amount after the sale. This option allows homeowners to avoid foreclosure, but they may make some common mistakes.
1. Failure to understand eligibility requirements
Each lender has specific criteria that homeowners must meet for the lenders to approve a short sale. Homeowners should carefully review their mortgage documents and consult with their lender to determine if they qualify.
2. Incomplete or inaccurate documentation
Another mistake is providing incomplete or inaccurate documentation to the lender. Lenders require detailed financial information to evaluate a homeowner’s eligibility for a short sale. This information typically includes income statements, bank statements and hardship letters. Failure to provide proper documentation can delay the approval process or result in the rejection of the short sale request.
3. Underpricing the property
Some homeowners underprice their property even more if they try to hurry up the short sale process. On one hand, pricing the property below market value may attract potential buyers. However, it can also result in a lower sale price than necessary to satisfy the outstanding mortgage debt.
Homeowners should work with a real estate agent who has experience in short sales. The goal is to determine an appropriate listing price based on the current market conditions and the mortgage balance.
It is helpful to avoid common short sale pitfalls in Texas and increase the chances of a successful transaction.
