While short sales can provide an excellent path out of foreclosure, they can also prove to be a difficult and time consuming task. How does one go about completing a short sale, or finding a buyer for the property? What about the paperwork involved? There are several precautions you can take to make this process less stressful and more likely to succeed.

The first thing you want to do is find a company who specializes in short sales or a real estate agent who is well versed in dealing with short sales. They will be able to guide you through the process and take care of much of the confusing paperwork involved. They should begin by having you fill out an Authorization to Release Information which allows them to discuss the short sale with the bank on your behalf. Once they have contacted your bank, they should be able to provide you with a list of documents your bank requires to complete the short sale. It is important that you provide all the required information because banks will not even consider the short sale if all the paperwork is not submitted. It is incredibly frustrating to go through all the work of attempting a short sale just to have your request rejected because the paperwork is not in order.

Often companies who specialize in short sales will buy the houses themselves. This is the most time effective way to complete a short sale because you avoid putting your house on the market and waiting for an interested buyer to find it. However, if the bank does not accept the company’s offer, or if you decide to complete your short sale through a real estate agent you will need to complete a listing agreement which will put your house on the market. Many times companies will also have real estate agents that work with them so they will be able to list your house or recommend an agent who is experienced in short sales. To determine the listing price, you should discuss what your house will sell for in the current market with your realtor. Remember, a good price is what gets you showings and allows you to sell the house faster. There is no point in listing your house too high when you are dealing with a short sale. If few people show interest in the house after the first couple of weeks try dropping the listing price.

Once you have an offer on the house, whoever you are working with will submit all the paperwork to the bank. The company or agent should ensure that any purchase agreement you submit clearly state that the offer will only be accepted if the bank also agrees to forgive the rest of the debt associated with the house mortgage. After the bank receives the offer, they will send someone to look over your house to see for themselves what the property is worth. Once that is completed they will accept, reject, or counter the offer. Even if the offer is not accepted, you will at this point at least have an idea of what price the bank is willing to accept. If the offer falls through, you can use that information to adjust your listing price to reflect what the bank is likely to accept.

Once an offer has been accepted, the buyer will have a specific time frame in which they must close on the property. You should be prepared to get packed up and move out during this time frame since the buyer often expects to take possession of the house on the day of closing. The company or agent you are working with should communicate with the bank, title company, and other agencies involved to make sure everything moves smoothly to closing. You will simply need to show up at closing and bring the keys.

One of the most important things to remember about short sales is they can take a lot of time. Depending on the bank, and how quickly a buyer can be found, short sales can take from a few weeks to over a year to complete. The process can be lengthy so be patient, and don’t get discouraged. Short sales provide a path out of debt and to a better credit score that is well worth the wait.