Avoid Foreclosure
Short Sale: A short is a special transaction that allows you to sell your home – even when your mortgage debt is higher than the value of your home.
Many people who are going into foreclosure may qualify for a short sale.
Before we talk about what the requirements are, I want to share with you the benefits of doing a short sale.
- First of all, you will avoid foreclosure as well as the negative effects that it has on your credit. If you work with the right short sale agent, your credit will show as one of three possibilities: "Paid as Agreed," "Paid/Settled for Less," or "Settled/Pre-foreclosure," once the transaction has been completed.
- With the proper exit strategy, you can be back on your feet again and ready to purchase a new home within 24 months, if you desire, and your situation permits.
The following conditions apply in order to qualify for a short sale transaction.
- You must have a valid reason why you are going into foreclosure. You cannot just say, “I can afford the house, but I don’t want it anymore.” If that is the case, the bank will likely turn down your request for a short sale.
- Next, you must be in a position where a traditional sale is not an option. In other words, you have no equity and you don’t have the cash to pay the difference if you were to sell your home for less than you owe.
- Finally, an expert short sale agent must qualify your lender before they move forward. Many realtors, investors, and real estate agents do not understand this step. A properly trained short sale agent knows how to qualify you for a short sale transaction, the success rate is over 80%.
So, before hiring just any “agent” to assist you in a short sale, make sure they are qualified and understand all of the work that is required to see you through to the end.
The actual short sale process can take as little as 10 weeks or as long as 4 to 6 months. In most cases 60 to 90 phone calls back and forth between the lender are required. The proper negotiation skills and documentation are required in order to have the correct presentation of the “packet”. The lender must be able to quickly see that you are qualified for a short sale. What is in the packet? That is a great question, but you will not find the answer floating around the internet. This is just one of the 3 main tools that sets a short sale expert apart from the rest of the “real estate experts”.
Other things to consider:
Some lenders are easier to work with than others. We have relationships with most of the major lenders, so we know what differences are involved with each lender.
If you have a home equity line of credit or did a cash-out refinance, there can be some recourse that the lender can take, and it could affect your income taxes.
In closing, be smart and make sure that you ask many questions before proceeding on this important journey. We are there for you, and we consider your success to be our success.
