What is a Short Sale?
A short sale is when the mortgage company agrees to a sale of a home at a price that is less than the amount of the balance due on the loan. In this case the home sales price is said to be ‘short’ of the loan outstanding.
After a short sale takes place the initial home owner (the one making the sale) may or may not be responsible for further payments to the mortgage company.
Who can qualify for a Short Sale?
Anyone that owes more than a home is worth may be eligible for a short sale, though it is up to the Mortgage Company or bank as to whether to accept a short sale.
It should be noted that a person does not have to stop making payments (be in default) to qualify for a short sale.
Every situation is different and the decision to go with a short sale, Foreclosure, Deed in Lieu of Foreclosure or other option is a difficult one. If you are in this situation, contact us today for a free consultation and begin your clean start now!
How does the Short Sale process work?
A short sale is commonly an alternative to Foreclosure or Deed in Lieu of Foreclosure. In order for your short sale to be approved by a lender, you will first have to be in a position where you owe more than your house is worth and you will be forced to sell the property soon.
As is mentioned above, you don’t need to be in default on your loan to qualify but you will have to show the lender that you will soon be forced to sell your property below what is owed on the loan. If you come to the lender before you fall behind in mortgage payments, the bank may see this as a sign of responsibility and be more willing to figure out a solution to your problem. If you are current on your payments but know that financial problems are in your future, contact us today to figure out your best strategy for a Fresh Start.
If you are in the position to pursue a short sale, the next step involves getting in touch with the decision maker at the mortgage company and convincing them that it is in their best interest to take less than what is due on the loan. This is no simple task and involves proving your current and future financial situation as well as the expected sale price of your home.
Once you convince the lender that you qualify for the short sale, a homeowner would then need to find a buyer at the acceptable price. When an offer is received at the acceptable price, the seller sends the offer to the mortgage company for final approval. After final approval is received from the mortgage company, you can go through with your short sale.