In our last post we defined a short sale. In order to qualify for a short sale, a home owner must be able to demonstrate one or more of the following:
- financial hardship,
- negative cash flow, where monthly expenses exceed monthly income, or
- evidence of pending loss and insolvency
The most common justification for a short sale is financial hardship.
And by far and away the number one reason used to justify financial hardship is a mortgage adjustment or loan payment increase.
Other qualifying hardhip reasons include the following:
- Separation or divorce
- Job loss
- Reduced income
- Excessive debt
- Death of a spouse or family member
- Severe illness
- Involuntary job relocation
- Business failure (for the small business owner)
- Damage to property
- Inheritance (for heirs receiving ownership of property)
- Military service
- Tax or insurance increase
- Incarceration
When you sell your home as a short sale, one of the things you will need to do is write a hardship letter to your lender. We recommend you keep the letter to a single page.
We'll cover this and other aspects of the short sale process in the near future.
Have a good day,
Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com
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