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For a short sale to occur, you must have a loan larger than what the property is worth. Homeowners can avoid foreclosures with short sales. Follow these steps to do a short sale in real estate.

To do a short sale in real estate, you should determine what your house is worth. If you are using a broker to sell your property then the broker should be able to give you an idea of what fair market value for your house is. To find out fair market value yourself, check out what comparable houses are selling for in the same neighborhood.

To perform a short sale, you must speak to your lender since they will be accepting less than the total amount due. Not all lenders will accept a short sale. Call the lender and ask to speak with the supervisor of the short sale or work out department. 

You may have to write a letter of authorization to the lender. If you are working with a broker or agent, the lender will be hesitant to give them any of your information until you write a letter of authorization. The letter should contain the property’s address, your name, the date, the loan reference number, and your agent’s information. 

Prepare a preliminary net sheet, which shows the sales price you expect to receive, costs of the sale, unpaid loan balances, outstanding payments due, late fees, and real estate commissions. Your lawyer or agent can prepare this net sheet for you.

To do a short sale in real estate, you should write a letter that includes a statement of facts stating why you want to do a short sale. This letter should also ask the lender to accept less money. 

Once an agreement is reached to sell the house, the lender will require a copy of the offer and listing agreement.

To do a short sale, you should speak with a qualified real estate agent or a lawyer specializing in real estate/short sales.  

Although agents are costly, they usually save you more money on the short sale.

Negotiate with the lender and ask them as part of the deal that they not report adverse credit to the credit reporting agencies.

Doing a short sale on your own can be very stressful. An agent can do the dirty work for you.