Going Through with a Short Sale When Facing Bankruptcy in Texas

 Posted on November 21, 2023 in Bankruptcy Law

If you are struggling with making mortgage payments and considering bankruptcy, a short sale of your home can be a favorable option. A Texas lawyer can help you determine how you can properly have a short sale for your situation.

Make Sure You Qualify for a Short Sale

You must have sufficient equity in the home and valid financial hardship to convince the lender to allow a short sale. Hardship examples include job loss, divorce, unaffordable mortgage rate resets, or heavy medical debts. The lender will typically require a current appraisal showing you are underwater.

Gather All Required Documentation

Lenders will request extensive financial records from you, such as tax returns, bank statements, income documentation, hardship evidence, and past-due mortgage notices. Organize everything thoroughly. Missing paperwork can torpedo the short sale approval.

Find an Experienced Real Estate Agent

A qualified agent who is very familiar with short sales can efficiently guide you through the complex process. Interview agents and ask pointed questions about their level of experience. Having an advocate negotiating on your behalf is invaluable.

Identify Serious Buyers

Your agent should market the home aggressively to find buyers who will make serious offers at or near market price. Select a buyer with financing already secured and few contingencies. Lenders want confidence the deal will close quickly. An attractive offer will help buyers move faster and get your sale ready for approval.

Submit the Offer and Wait Patiently

After submitting the purchase contract and all supporting documentation to the lender, prepare for a lengthy approval process. It may take 2-4 months to get a final decision. The lender will likely counter at least once before agreeing. Stay in close communication with your real estate agent for updates.

Get Approval in Writing

Once approved, ensure you receive the lender’s official written approval letter. This is essential to legally protect you from any claims down the road related to the portion of mortgage debt the lender has to write off.

Close According to Schedule

When the closing date arrives, adhere strictly to the schedule. Delays or problems could still derail the deal even after approval is granted. Breathing easy must wait until after closing and funding are complete.

With proper preparation and strategic timing, a short sale can successfully precede a bankruptcy filing for Texas property owners who owe more than their home is worth.

Contact a San Antonio, TX Bankruptcy Lawyer

Going through a hard time financially and being unable to make your mortgage payments can feel daunting. It may feel like there is no way out. However, a Boerne, TX bankruptcy attorney can help you figure out if a short sale option may be best for you. Call Law Offices of Chance M. McGhee at 210-342-3400 for a free consultation.