Short Sale Guide

A short sale is an arrangement where your lender agrees to let you sell your home for less than your mortgage balance. With more and more families hit by the recession, short sales have become a popular way for Laguna Beach homeowners to avoid foreclosure. But if you're considering putting your home up for a short sale, you may want to sit down and do a bit of planning first.

Short sales don't take place the same way as regular sales. For one thing, although they're on the rise, they're still considered unconventional in the Laguna Beach real estate market. You also have less choice in several areas such as pricing and negotiating. Your best bet is to get informed and find ways to make the process smoother. Here are some quick tips to help you get started.

Get a good agent. Most people would hesitate to hire an agent-after all, they're already on the losing end. But a good agent can help you get more out of the deal and better understand the terms of the short sale. Many agents have started taking on more short sale sellers, but look for one with more experience, specifically with Laguna Beach homes.

Write a convincing hardship letter. Your hardship letter is one of the main requirements for a short sale. It's where you explain to your lender how you fell behind and convince them that a short sale is your most viable option. You need a valid reason for your situation, such as job loss or illness, and make sure you have the documents to prove it.

Gather all your paperwork. Lenders will want proof of your claims in the letter, as well as financial documents showing that you had good credit prior to your hardship. The requirements vary from lender to lender, but for most Laguna Beach homes, you will usually need bank statements, tax returns, pay stubs, and basic real estate documents.

Price your home properly. Once your lender agrees to a short sale, one of your first steps is pricing. This works a little differently from other Laguna Beach homes, since you're selling at a loss. Work with your agent to set a price that's meets your lender's standards, taking into account related expenses such as late fees, commissions and legal fees.

Market your home. Your agent can help you get word around about your short sale property. You probably won't attract the same buyers as conventional homes-many buyers are still wary of buying short sales and foreclosures. Find simple ways to improve your home's curb appeal, get it on more listings, and expose it to more potential buyers.

Keep contact with your lender. Throughout the process, make sure to keep your lender updated on the progress. Don't take any steps without the bank's approval; otherwise they can stop the sale altogether, leaving you with no choice but foreclosure. A good agent can get you in touch with the right office so you don't have to make several calls.