When a short sale is approved, it means the bank settles on an amount less than what's owed on a mortgage foreclosure. Even if you owe more than the value of your home, you'll be able to sell it just in time to avoid foreclosure whether you're going to do a short sale Phoenix, or anywhere else in your state.

If you were to sell your home foreclosures the conventional way, you would generally have to bring a very large sum of money to the closing to sell your own home. At times people are able to obtain some moving cash out of the deal, where they receive nothing if they had to let go of their house back as a bank foreclosure.

The very first thing you need to do is to get pre-qualified. You have to call your lender and tell him that there have been changes in your financial circumstance and you want to prevent foreclosure by selling your home. Majority of lenders have a sale form that can be emailed or faxed. The form will indicate what papers you'll require to obtain and give to your lender in order for them to establish if a short sale is possible. Call your certified short sale realtor to help you walk through the process and submit your information.

The information needed typically include tax returns, paycheck stubs, bank statements and a hardship letter. These papers demonstrate to your lender that you are indeed experiencing financial situations that make it difficult to repay the loan. Check with the HAFA Program for assistance.

Once your application has been pre-qualified, you can now advertise your home to find an eligible buyer. In this case you will also need and must hire a short sale realtor. Keep in mind your main goal is to avoid having a foreclosure and negatively affecting your credit history, not to profit from the sale.

Once you've found a suitable buyer, it's time to give to your lender. Your realtor will take care of all of that
your purchase agreement and the buyer's information,. If your lender approves the offer, then the short sale agreement is signed and delivered to a title company who will handle the closing of escrow.

Some Advice On Doing A Short Sale

The bottom line is you focus on the lowest BPO possible. That's one of the most important factors of a short sale. Beware of high-interest second mortgage. When a home has equity, there are companies that will offer you a second mortgage, in a sum as high as 70 percent of the existing equity. The interest rate could be as lofty as 18 percent and the charges can be excessive. They simply want you to default, and this enables them to repossess your home.

Finally, some companies will state that after the mortgage is current they will re-sign the home back to you. This doesn't occur often. Rather, the company is most probably going to pull out equity, avoid any mortgage payments and enable foreclosure. Thus, if ever in the future you'll experience a foreclosure, you won't be able to retain your home since it's no longer in your name. So when you do a short sale Scottsdale or short sale anywhere you are in the U.S. make sure you are informed and active in the process as much as possible. Make sure you have a realtor that is experienced and well educated in the short sale and HAFA process. Maureen Karpinski