What is an essential step a homeowner must complete before listing a property for a short sale?

Getting lender approval is an essential step for a homeowner before listing a property for a short sale because it involves securing permission from the lender to sell the property for less than the outstanding mortgage balance. A short sale occurs when the homeowner is unable to continue making mortgage payments and wishes to avoid foreclosure. Without obtaining this approval, a homeowner cannot proceed with the sale, as the lender must agree to accept the lower amount as settlement on the mortgage loan.

Additionally, lender approval typically involves the submission of financial documentation to show the homeowner’s inability to pay the mortgage, thus making it crucial to formalize the short sale process before proceeding with listing the property. Other choices, such as obtaining a new mortgage, consulting a financial advisor, or completing renovations, may be beneficial but are not requirements for initiating a short sale.