Many Wisconsin home owners are thinking of going through a short sale whenever they are having problems with their mortgage payments. In reality, they don’t really know how a short sale works. This article will give them a better understanding of how short sale WI works.

A short sale is the process of selling a nearly foreclosed home at a price that is lesser than the total mortgage amount. For the borrower, it is an alternative to foreclosure. To the lender, it is a way to mitigate loss and avoid the possibly more difficult and costly foreclosure proceeding. To the buyer, it is a way to acquire property at a discounted price.

Typically, a short sale is daunting and confusing, especially if you are not familiar with how it works. But with a qualified WI short sale agent, it can be easier for you.

Short sale WI starts when there is a potential buyer for your defaulted home. Once the buyer makes an offer, the seller and the agent will deal with the lender about the short sale. Here’s how it works:

• Your WI short sale agent will assist you in preparing a purchase agreement with your buyer. The agreement outlines the details of the short sale and must be submitted to your lender for approval. Such purchase agreement should include the sales price and shows the lender’s profit from the sale.
• You must provide a hardship letter showing your current and future financial turmoil. You must include supporting documents of your hardship such as a termination letter, medical bills, pay slips, bank statement and tax returns. These will show your lender that you are incapable of completely paying your mortgage loan.
• Once your lender receives the purchase agreement and hardship letter, they will require appraisal of your home to determine the BPO (Broker’s Price Opinion). With this, they can assess the market value of the house and determine if they are financially better off with short sale or with having your home foreclosed. This process typically takes few weeks.
• If the lender’s decision is against short sale or against the buyer’s offer, the real estate agent can negotiate or counter any counter offer; showing more proof and documention. At this point, you and the potential buyer would have to wait for the result of the negotiations which could last for several weeks.
• If the lender approves the short sale, then the home will be sold just like any home selling transactions. You are given time to move out until the new owner will take over the house.

The good thing about going through short sale WI is that you do not have to vacate the property immediately; unlike foreclosure, which obliges you to vacate immediately after you receive the final foreclosure notice. Also, you will be able to buy a new home after 2 years; unlike foreclosure, which allows you to purchase new home only after 5 or 7 years.