Do you need to short sell your home?

What is a short sale? A short sale occurs when the value of a home is less than what is owned. This could be attributed to many factors, but often is a result of a rapidly declining housing market.

For many homeowners, a short sale is an ideal way to avoid foreclosure or bankruptcy when they can negotiate with the lender to write off the difference.

How do I proceed with a short sale?

First, find out the true market value of your property. Since paying for a licensed appraiser may not work with your already tight budget, an experienced local real estate professional that knows the current conditions of the real estate market is a sound way to get a reliable estimate of your home's worth.

Next, estimate your closing costs. My work in this area means I know to take into account fees like title report, appraisal, escrow, property taxes, and agent commissions to estimate your final costs upon closing.

Finally, get in touch with your lender and tell them of your situation. They may even have a dedicated department that manages short sales. Ask about their exact procedures. Some lenders will be more inclined to work with you than others. They may be able to reduce your loan principal or make other arrangements. Your lender will have to approve the final sale.