Short Sale Simplified (an alternative to foreclosure)
Short sale, it’s becoming a popular word in real estate conversations. But, what exactly is it, and how does a “short sale” differ from a traditional “straight sale“?
A short sale is a real estate transaction where the amount owed is larger than the market value of the property.
With a traditional sale, the seller of the property is financially responsible for the difference between the sale amount and amount owed. But, with a “short sale”, the bank (or any lender) agrees to take a loss for the amount of the negative difference.
Not every seller who has mortgage payoff greater than current market value qualifies - sellers smut demonstrate a proven hardship. There are guidelines and regulations that apply to a short sale. If the seller has the means to pay the difference through other assets such as savings, and/or they have income that allows for payments, they will likely be denied the “short sale” opportunity.
"I work with only the most qualified and committed facilitators and lawyers who coordinate their efforts to give your short sale the best chance for success."
With an approved short sale, the real estate brokerage fee (commission) is paid by the holder of the mortgage, as is the fee for professional facilitation in most cases.
Short sale buyers need patience and must be considered a “strong” buyer and the process can take months to come to conclusion (closing).
Short sales have a serious negative impact on credit scores for the seller, but, the impact varies from case to case. Conversely, a foreclosure can have a huge impact on credit scores.
Short sales are usually considered by the lender after the property is “listed” for sale and a buyer is secured with a signed Purchase and Sales agreement. Although recently, some lenders are suggesting the short-sale process to borrowers who don’t qualify for mortgage modification.
Condominium owners need to be sure they stay current with their home owner fees as these balances will not be covered by the lender at settlement time.
Short sales can be the financial solution for many property owners who are “upside down” in their property ownership.
If you believe a “short sale” could be the right solution for anyone you know. I am available to help with consultation, market value reports, and marketing solutions. Please forward this message to anyone who may benefit from it.
