Some excellent information from RE/MAX agent Laura Coffey, thanks Laura great job!
What is a Short Sale?
Sometimes a short sale can be a good solution for homeowners who owe more on their homes than they are worth and who need to sell. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders have become much more negotiable when it comes to these transactions. It typically cost lenders $40K to foreclose on a home so approving a short sale is a good alternative. Recent changes in corporate policy and the government administration have also improved the chances of getting a short sale approved.
But to be technical, here's a better definition:
- A homeowner is 'short' when the amount owed on his/her property is higher than current market value.
- A short sale occurs when a negotiation is entered into with the homeowner's mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then 'sold short' of the total value of the mortgage.
- This would include normal closing costs and including commissions.
For homeowners to qualify for a short sale, they must fall into all of the following circumstances:
- Financial Hardship - There is a situation causing you to have trouble affording your mortgage.
- Monthly Income Shortfall - In other words: You have more money going out, than coming in. A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
- Insolvency - The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage. In other words: No equity at all and no money in your bank accounts.
A short sale can be a complicated process but with the right assistance from an experienced professional trained in short sales it will be much easier. They can help you through it with ease, education, and care. Find a CDPE in your area or contact me and I can help you locate one near you. I am currently helping families in the Santa Clarita, San Fernando, and Simi Valleys. A CDPE can assist you in the quick execution of a short sale transaction.
For more information about short sales or if it's the right solution for you please click here.
Laura Coffey, ABR, QSC, CDPE
For all your Real Estate needs please visit www.Laura4Homes.com
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To answer questions or concerns regarding your personal options to avoid foreclosure please visit www.SCVDistressedPropertyHelp.com