What a great blog, very informative, very well written! I agree that many Sellers think a "short sale" is automatic. There must be a bonafide hardship in order for the lenders to agree and work with sellers ... especially in Nevada! Great Post Terrie ... thanks for sharing!
Northern Nevada Short Sale Hardships ~ Does your hardship qualify?
Many Reno area home owners are turning to short sales to get out from underneath the mounting financial pressure they are feeling in today's declining real estate market.
A short sale, simply stated is when you sell your home for less than what is owed on the mortgage and the bank accepts this amount.
Nevada home sellers are not entitled to a short sale simply because they have lost equity in their home or they don't like what it is worth at the moment.
You cannot short sale you home because your neighbors, friends and family are doing it. You must prove, in the eyes of the lien holder, a valid hardship.
As a Northern Nevada home owner, you must prove a hardship to sell your property as a short sale. It is easy to prove your home is not worth what you own on it so you must be able to provide the lender with a valid hardship.
To do this, sellers must provide the lien holder with a monthly financial statement that shows a negative, or almost negative, cash flow at the end of the month. If you have a positive monthly cash flow with no hardship, your request for a short sale will more than likely get declined. You do not have to be late on your monthly mortgage payment but you do have to show reasons why continuing with your payment will be difficult.
So before you eagerly jump on the Short Sale bandwagon you may want to consider the following list of hardships your lender might consider for short sale approval:
- Sudden Loss or Reduction in Income
Unemployment/Loss of Income
- Divorce (not always)
Death of a Spouse
- Medical Bills/Medical Emergency
Adjustable Mortgage Payments
Here are a couple of things the bank will not consider as a hardship:
- Unhappy with size, location of home
- Purchased Another Home
- Home Value Declined
You do not need to be late or behind on you monthly mortgage payments but you absolutely must prove your lender with a financial hardship if you want short sale approval. Before you stop making your monthly mortgage payments or ask your bank for a short sale make sure you review your financial statements. Consider the above qualifications to make sure your hardship is appropriate.
I often send sample hardship letters to sellers that give an idea what most banks will consider as a hardship for approving a short sale. I also send short sale information to help prepare them for the short sale process. If you would like additional short sale information I would be happy to send you information as well.
Does My Hardship Qualify For A Northern Nevada Short Sale?
Certified Distressed Property Expert (CDPE)
Certified Default Resolution Specialist (CDRS)
Short Sales & Foreclosure Resource ~ Certified (SFR)
Ferrari-Lund Real Estate
The information in Terrie Leighton's Blog are believed to be accurate and true but are not guaranteed! Terrie Leighton is a licensed real estate agent with Ferrari-Lund Real Estate serving the areas in Reno and Sparks Nevada.