You might be surprised at the seemingly simple answer, but it’s pretty much the same qualifications that happened previously. Here’s a quick run down of how to qualify for a short sale in 2017.
- Must Be “Upside Down” – You must owe more money on your home mortgage than it’s worth. Even though the market has gone up in recent years, there are scenarios where this could be true. Often it’s an equity loan or refinance at a higher price than what the market is currently at that leaves homeowners in this situation.
How could this happen? Appraiser are the most powerful people in real estate (this is why Zillow shouldn’t exist), because they influence everything. Unfortunately, on a refinance there’s no standard to keep the value down. So they have free reign to over-appraise… after all you won’t need to sell for a while and appreciation will help you get back your value.
- Must Be Able To Show A Loss Of Income – The keyword here is “taxable.” If it’s taxable it can be seen and measured. A key point here, is that if you’re doing a loan mod, the bank will only look at your taxable income, if you wanted a loan, same thing – taxable income. On a short sale they seem to want all of it. It’s our opinion that you would conveniently leave non-taxable income outside of the short sale process.
Interesting it’s really the same requirements when we covered how to short sale your home a few years ago. No matter what state you live in, the those 2 keys to qualifying for a short sale are the same. So if you have a home in Ann Arbor or a home in Garland, TX, you’ve got those two requirements.
Of course, you will have to prove a hardship, which is just an explanation of why your income went down. You’ll have to provide bank statements, a tax statement and a buyer’s offer of course. A good honest real estate agent that specializes in real estate can help you with this.
It’s worth noting that the home needs to be in decent shape to be sold. If it’s not you may have to sell it to an investor as many home buyers are only willing to wait for your home if it’s a good deal and move in condition. The biggest reason for this is that the bank relies on really poor broker price opinions to figure out value during the short sale process.