How do you short sell your home?

Due to unstable financial situations, a homeowner may suddenly not be able to pay the mortgages. To avoid the embarrassment and the hardship of losing your home (not to mention destroying credit score) because of foreclosure or bankruptcy, some people opt to go for a short sale.
Over the last few years short sales have become more prominent. Statistics have it at thirty to fifty percent success rate. However, if you get a good agent, he or she can close at a ninety percent success rate. So how do you short sell your house?
First, you need to get yourself an agent. A good agent will know how do you short sell your house properly. They will also have with them a certified public accountant (CPA), bankruptcy attorney, and sometimes a real estate attorney. If your agent does not have these resources, then you better get another agent. A real estate agent cannot give you proper advice especially on short sale tax ramifications. You will need a competitive team of bankruptcy lawyer and CPA for a short sale to be a success.
When good real estate agents are asked the “how do you short sell” question, they will usually answer with one word: Patience. A short sale process can take anywhere from twenty-four to one hundred twenty days, depending on the bank. Also, you need to be prepared to have a good and reasonable explanation as to why you have to short sell your house. Some of the acceptable reasons for short selling your house are unemployment or reduced income, medical emergency, death, or divorce. Having these reasons can’t guarantee that your short sell will be approved by the bank.
You will also need to prepare a letter of authorization. This letter will state that you are allowing your real estate agent to speak in your behalf to the bank. You will also need a preliminary net sheet. Your agent or lawyer should be able to prepare this for you. Another requirement is a Hardship Letter. Make sure you are completely honest with your letter. The bank or lender will usually understand your situation so long as it does not involve false statements or criminal behavior.
You will also need bank statements. If you have unusual deposits or large withdrawals, it is best you explain those items honestly. Proof of income and assets are also a requirement when short selling. The lender or bank will want to know where you are getting your money and that you really will not be able to pay the remaining balance in your mortgage. If you have found an interested buyer, you should also submit a purchase agreement and listing agreement. However, you have to be aware that at anytime, the lender may want to renegotiate.
If all goes well, you can also ask your lender not to report your short sell to credit reporting agencies. However, it is entirely up to the lender to say “yes” or “no” to you. Your credit report status, depending on the lender, may not be up for negotiations.