The below information clearly defines short-sale and its fundamental requirements. Read carefully before getting involved in the process.
The term “upside down” in finance industry refers to a particular home loan amount exceeding actual property value. Few homeowners are lucky enough to come up with promising real estate values among even during intense market competition while others simply can’t meet large mortgage obligations. They simply move to another place with less fluctuating economy. Process of selling a home less than its accredited worth is known as “short sale”; let’s have a look at some basic requirements if you’re making the same attempt.
Usually, lenders aren’t interested in short-sale requests unless you’ve a valid reason or provable financial adversity such as infirmity, job transfer or loss. Banks usually perform a survey to determine whether you’re fiscally stable to pay timely mortgage and fulfill other obligations. If results are optimistic, they won’t agree to a short-sale term. Other hardship criteria include divorce, bankruptcy, income reduction or worse; death.
The Mortgage Factor
Approval of “Upside down” is necessary if you wish to qualify for short-sale agreement. The first thing is to provide solid evidence to finance and real estate agencies that your mortgage amount is significantly higher than current property price. If you meet this hardship criterion, short-sale will be allowed. However, when selling properties in Cairo, Egypt or any other place, determine state laws before getting involved in the agreement as rules may differ!
Bank Acceptance Criteria
No bank is willing to lose money for a short-sale deal so it leaves no stone unturned when conducting preliminary investigation. Appraisal of existing home value in markets located within close proximity is the first practical step. Lest the offer is too low, bank will likely reject it to avoid loss. Dealing with such predicament, proprietors must carefully review latest sales trend dwindling in the vicinity before listing. Bank also assesses current debt to income level so do maintain all the documents.
Document Requirement & Compliance
You’ll need assistance of a certified realty agent, acting as a mediator between seller and bank. This is to counter legal hindrances which might disrupt the smooth process. Approaching financial companies directly and getting short-sale agreement approved is quite intricate but not if you charter an agent. Document prerequisites, getting them submitted to the concerned party and proving that mortgage is actually “upside down”, all can be achieved easily via personal representative.
Essential paperwork include hardship letter that’s concise yet completely describe your financial position. Approval letter permitting agent to speak with bank on your behalf, finance sheet clearly explaining how much lender expects from the sale, tax return for last two years, present payment stumps lest you’re an employee and two months bank statement. Some other requirements include proportional market investigation outlining all recent sales within your neighborhood when compared with similar properties.
Offer Submission: A Look into the Process
All the documents and requisites must be fulfilled along with agent’s requirement or bank will likely delay the process. Also, you may need to resubmit entire documents from scratch if something imperative goes missing. Agent must submit his listing agreement, potential buyer’s loan approval letter, copy of checks, hardship packet and offer agreement completely signed to you while keeping a copy with him.
This article is offered by Howayda Alame on behalf of Listaproperty.com, where people of MENA region can find Egypt real estate listings.