Are you currently behind on your house payments? Facing Foreclosure? Thinking about walking away? Before you do anything call (559) 490-0450. We offer FREE services that could help save your credit. Do a Short Sale!
What is a Short Sale?
A short sale in Real Estate is the sale of a home or piece of property for an amount that is “short” of the full amount owed on that property. It is usually done when a property’s fair market value is less than what the property can be sold for. (For example, you owe $380,000 and your house has lost value and is now only worth $310,000). A short sale is also referred to as a Pre-Foreclosure sale and can be beneficial to homeowners that are facing foreclosure.
Most mortgage lenders will consider a short sale if the homeowner has fallen or is about to fall behind on their payments. Once a homeowner has fallen behind on their payments, they will begin to receive phone calls and letters from their mortgage company. This can be very distressing since most people don’t know what their options are at that point. Most of the time the mortgage companies will try to get their money by encouraging a loan modification in which they will set up an arrangement with the owner to make increased payments for a certain amount of time to cover the defaulted amount. (Of course, if someone can’t afford their regular payment, then an increased payment is not an option!)
A short sale is an option that mortgage lenders are doing more and more. Usually the short sale process takes up to 60 days, however, if there is more than one lien on the property, the time frame may be longer because each lien holder has to agree in writing to a short payoff. Any escrowed funds, (i.e. taxes & insurance that are included in the regular monthly payment) will not be refunded to the borrower after the closing of a short sale. Any and all funds are surrendered to the primary lien holder. A short sale will adversely affect the homeowner’s credit.
Short selling a home can be a very lengthy and demanding process. Most lenders won’t consider a short sale unless the homeowner is working with a real estate agent. Once someone has decided to do a short sale, they should interview someone that has experience in working with and negotiating short sales with the mortgage companies. This also relieves the owner of the stress of dealing with their lender directly.
A short sale is a good option for someone who is facing foreclosure or has a recent hardship due to job-loss, illness, divorce, or death. The process is quite arduous and requires much cooperation on the part of the borrower to provide financial documentation, letters of circumstance, tax documents, bank statements and any other documentation required by the lending institution(s). A homeowner’s financial circumstances will influence the lender’s decision to approve or deny the short sale. These circumstances are also related to the current market and the offer being submitted. In the long run, a short sale is a good way for homeowners to avoid foreclosure and bankruptcy.
Call (559) 490-0450 today to set up a private appointment.