What Is A Short Sale?A short sale is the sale of a property for less than what the borrower owes to the lender. A short sale is an alternative to foreclosure when a homeowner wnats to sell and can no longer afford to make mortgage payments. The lender agrees to accept less than the amount owed to pay off a loan now rather than taking the property back by foreclosure and trying to sell it later. Lenders agree to a short sale because they believe it will net them more money than going forward with a lengthy and costly foreclosure process.
Can Any Real Estate Agent Effectively Handle My Short Sale?No. A short sale is a very complicated real estate transaction and one that has very important implications for you. More than any other type of residential real estate transaction, a short sale should be handled only by a real estate broker who has substantial experience with the short sale process, and a strong track-record of success in obtaining approvals of short sales for their clients.
Why Should I Choose A Short Sale Over Foreclosure?Whether you should do a short sale or let your property go to foreclosure depends on several factors. In most instances, a short sale makes more sense than foreclosure. In general, when you want to obtain a loan to purchase a property in the future, more opportunities will be available to you if you do a short sale. And, contrary to popular belief, you can be current on your payments and still do a short sale. In fact, if you are current on your mortgage through a short sale, you can qualify for an FHA loan afterwards without any waiting periods. The same option will not be available following a foreclosure.
While doing a short sale will negatively affect your credit, there are many benefits to choosing a short sale over foreclosure. With a short sale, you are in control of the sale, not the bank. You can spare yourself the social stigma of foreclosure.
Every homeowner's situation is different, so we always recommend that you speak with a real estate attorney that can advise you on the legal and tax implications for your circumstances.
How Do I Know If I Qualify For A Short Sale?If you owe more than your house is worth and can't afford your mortgage payments, you may qualify for a short sale. Every situation is unique, but in general the basic criteria for qualifying for a short sale are: • You want to sell your home.
• You owe more on your mortgage than your home is worth.
• You have a personal financial hardship that will prevent you from making future payments. (Examples of hardship include loss of job, divorce, death of a spouse and medical emergency or illness.)