Foreclosures Book

purchase offer — or a fully executed sale contract — in hand. It’s much easier to get a lender’s approval if you can demonstrate that a buyer is already interested. From there, requirements vary by lender, but in most instances, the bank or other lending institution will take two primary factors into account when deciding whether to approve your short sale application. One is that you, the borrower, are experiencing a hardship that impairs your ability to make payments. The second factor is that the home lacks sufficient equity to pay off the mortgage after costs of sale are considered. What constitutes a hardship? It could be a bankruptcy, unemployment, or other reduction in your income. Perhaps you’ve been forced to accept a job transfer to another part of the state or country. It could be a medical emergency, divorce, or even the death of a loved one — especially one of the individuals responsible for making mortgage payments. Start by doing some homework. It’s your obligation to convince the lender that a short sale is in their best interest and that you can make it worth their while, so don’t short your preparation. Research the prices of homes in your area that are comparable to yours. You might need to list your home for less than what it’s worth to attract a buyer — you have a deadline to meet. However, the lender still will expect a fair price for the property, at —or very close to — market value. The lender will obtain an appraisal on the property — sometimes called a Broker Price Opinion, or BPO— to verify its market value. Don’t be surprised if the lender refuses to share the BPO information with you. Usually you, the seller, will not be allowed to receive any