Real Estate Short Sale Process

When you are interested in doing a real estate short sale, you will need to learn about real estate short sale process, especially specifics of real estate short sale process in your state.

A Real estate short Sale process isn't the same in every state, but it generally works like this:

1. The homeowner is behind on payments and doesn't want to be foreclosed upon, so he/she contacts an investor who knows how to do short sales.

2. The investor has the homeowner sign a contract that says he or she is willing to sell the house for the amount owed, no more.

3. The investor then goes to the lender and convinces them that the house in question isn't worth that much in the first place, and also that the homeowner's situation is grim so they will either have to sell to him, or go bankrupt.

4. The lender has to decide how much of a loss they can afford to take on the house, so their Loss Mitigation department runs numbers for a while and gets another appraisal before agreeing.

5. The same goes for any other mortgages on the house. (2nd mortgage, 3rd mortgage, etc.)

6. Finally the lender agrees, the investor coughs up the cash, and in the most amiable way possible, he buys it and helps the homeowner move on with the next chapter of his or her life, while the bank forgives the debt.

It's actually a lot more complicated than that, and there really is no such thing as a guarantee... Some investors are greedy and will try to charge the homeowner something additional, while some banks are sneaky and try to find a way to go after the homeowner for the difference later! (Although working with an ethical, experienced investor will avoid both risks.)