Get Qualified Help Before Making Short Sale Decisions

How many of us live with the famous, “Shoulda, woulda, coulda,” scenarios? Realistically, we all do. However, you don’t want to experience the “if onlys” when you are looking at your credit report. This can be avoided by making a lot of proactive decisions throughout life, but sometimes you come up against issues that make it tough to know just what to do.

Take the issue of a short sale. There are a lot of things that come into play when you consider this option, and one of them is “how to qualify for a short sale”.

Challenges to Qualification

Here’s a good illustration of the point: A couple were good at budgeting, and when one of them lost their job they saw that the “bumper” they had created in their savings would be eaten up in around three months’ time. They hoped that work could be found and lost momentum regained before then, but to be safe, they got in touch with a realtor about the situation.

Should they downsize and sell now?

What would happen if they couldn’t sell?

The realtor they contacted was one that specialized in short sales. This professional advised the couple to take the necessary steps towards the short sale just in case things didn’t go as planned. This would get them well ahead of the game and it would be a case of “no harm, no foul” if the much needed employment occurred and their finances got back under control.

This realtor helped the couple assemble a preliminary short sale package to submit to the bank. In it, they detailed the immense hardship created by the lost job, and how they would soon be unable to make payments.

Interestingly enough, they soon discovered that their lender required them to be delinquent on the loan to qualify for a short sale. They could not even enter negotiations until they were in this condition. Once they were delinquent (60 days later), the negotiations occurred and the house sold quickly thanks to their realtor’s experience in short sales.

Sadly, this set the stage for a problem with the couple’s credit scores later on. Though they got into a short sale to protect their credit, they discovered that a delinquency coupled with the short sale (which appeared as “settled” rather than “paid in full”) caused their scores to drop dramatically.

Was it avoidable? Probably not. If the bank demanded this of them it was not something they could have negotiated around. However, they did the right thing by getting in touch with the realtor and putting together that package straight away. This shortened the timeline for the entire transaction and allowed the couple to move on and begin rebuilding their lives very quickly.

No one wants to deal with the idea of a foreclosure or even a short sale. However, you can take steps to make things less damaging. The first step is to contact a professional to explore the options and remove all of those, “Shoulda, woulda, coulda,” moments down the road.

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