 Knowing the Short Sale Process.
Homeowners do have options listing their property for sale when it is realized that their situation cannot be rectified. Reasons might be lose of a Job, divorce, sickness or a death of a spouse or family member. If a loan modification was unsuccessful your next step to avoid foreclosure is a Short Sale.
What is a Short Sale ?
A short sale occurs when the property’s value has declined. If you have gotten behind in your mortgage payments, the amount owed continues to climb along with unpaid interest. Let me give you an example: you have an unpaid principal balance amount that is $400,000.00 but your homes value is only at $350,000.00. This situation would merit a short sale. The difference between Short Sale and a Foreclosure:
Possession of the property is taken over by the lender. Mainly due to a home owner that became delinquent on their mortgage payments without taking other action to save their home, for example selling the property as a short sale. This situation the lender begins the foreclosure process. The property will first go to auction at a Trustees sale which will need payment in full like the means of a cashiers check. Do not try this at home unless you have experience purchasing properties at auctions. Be VERY VERY CAREFUL ! Also: keep in mind that if there is more benefit for the lender to foreclose a short sale will more than likely be denied. What are the consequences of a Short Sale?
 A short sale is less damaging than a foreclosure. Foreclosures remain on your credit report for 7 to 10 years. Trying to find another loan will be difficult. Lenders will also report short sales to the credit bureaus. Your lender will issue a short sale approval letter with details of the approval - this should be read carefully. This will be very important as your lender may accept the financial loss, or take legal action to obtain the difference. Do not back down NEGOTIATE and make certain you will be no longer liable for the difference. Selling a Short Sale:
The seller should seek the advice of a professional Realtor® who is kn owledgeable selling short sale properties and knows how to put together a short sale package for all banks involved. You will need to figure out the correct value of your property and to have a Comparative Market Analysis (CMA) done by your Realtor to give you a picture of how the market is doing in your area. Call me for more information to discuss how I can help. You can reach me direct on 714.943.0444. |