Trying to short sale your home in Studio City CA or Sherman Oaks CA may not be a real pleasant jurney.

•Obtain legal advice from a competent real estate lawyer(you can find great lawyers in Sherman Oaks/ Studio City Directory)

•Call an accountant to discuss short sale tax ramifications

As a real estate agent in Coldwell Banker Studio City CA, I am not licensed as an attorney nor as an accountant and cannot advise on those consequences. Except for certain conditions pursuant to the Mortgage Forgiveness Debt Relief Act of 2007, be aware the I.R.S. Might consider debt forgiveness as profits, and there is no assurance that your lender who accepts a short sale will not legally pursue a borrower for the difference between the amount owed and the amount paid. In some states, this amount is known as a deficiency. An attorney can determine whether your mortgage qualifies for a deficiency judgment or claim.

Although all mortgage lenders have varying requirements and may demand that a borrower submit a extensive array of documentation, the following steps will give you a pretty good idea of what to expect.

•Call your mortgage Lender

You may need to make a many phone calls before you find the right person that is responsible for handling home short sales in your area(Studio City CA, Sherman Oaks CA). You don't want to talk to the "real estate short sale" or "collection" department, you want the department supervisor's name, the name of the individual capable of making a decision.

•Submit Letter of Authorization

Lenders typically will not disclose any of your personal information without written authorization to do so. If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender authorization to talk with those specific interested parties about your situation. The letter should include the following:

•Property Address

•Loan Number

•Your Full Name

•The Date

•Your Real Estate Agent's Name, Real Estate Company & All Contact Information

•Preliminary Net Sheet

This is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unsettled loan balances, outstanding payments due and late fees, including real estate commissions(to your real estate agent, title company,etc), if any. Your closing real estate agent or attorney should be able to arrange this for you, if you do not know how to calculate any of these fees. If the bottom line shows cash to the seller, you will probably not need to short sale your home.

•Hardship Letter

The sadder, the better, funny as it sounts but it's so true. This statement of your reality describes how you got into this economic bind and makes a plea to the lender to agree to less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or what ever bad could happen to your entire family, but lenders are not particularly empathetic to situations concerning untruthfulness or criminal behavior.

•Proof of earnings and Assets

It is best to be truthful and sincere about your fiscal condition and reveal assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lenders are not a charity organization and often require assurance that the debtor cannot pay back any of the debt that it is forgiving.

•Copies of Bank Statements

If your bank statements manifest unaccountable deposits, larger cash withdrawals or an unusual number of checks, it's probably a good idea to explain every one of those line items to the lender. In addition, the lender might want you to account for each and every deposit so it can determine whether deposits will continue.

•Comparative Market Analysis

Sometimes markets decline and property values fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this reality should be substantiated for the lender through a comparative market analysis (CMA). Your real estate agent can prepare a CMA for you, which will show prices of similar homes:

•Active on the market

•Pending sales

•Solds from the past six months.

•Purchase Agreement & Listing Agreement

When you reach an agreement to sell with a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate commissions and to refuse to pay for certain items such as home protection plans or termite inspections.

Now, if everything goes well, the lender will approve your home short sale. As part of the negotiation, you might ask that the lender not report adverse credit to the credit reporting agencies, but realize that the lender is under no obligation to accommodate this request.

These days foreclosures and short sale homes in the San Fernando Valey CA is very common. Many homes are foreclosed and it's lowering homes values, if you're in a situation and need some help call your local realtor(Studio City, Sherman Oaks, North Hollywood, Valley Village, etc) and get help.

I work for Coldwell Banker and most of my listings are short sales in the los angeles area and I would love to sell your home for you and prevent you from going throught foreclosures.