What is a Short Sale?
Foreclosure on a home has consequences for the family, the community, the housing market, and the economy. However, the option for a short sale provides a way for troubled homeowners to prevent foreclosure and many of the dire penalties involved.
A short sale is an agreement in which your mortgage lender agrees to accept a payoff on the loan for less than the balance. Many lenders agree to a short sale because they receive more of the loan balance in comparison to the amount they would gain from selling the property following a foreclosure. This process also aids in maintaining home values in the community where the property is located and helps the homeowner maintain a better level of credit compared to a foreclosure. In most instances, homeowners considering a short sale must meet specific criteria to quality: you must be behind in your mortgage payments or in imminent danger of default, provide evidence of economic hardship, and have little or no equity in the property.
A short sale is not a typical real estate transaction. Most real estate transactions involve the home seller and their real estate agent, the buyer, their mortgage lender, and their real estate agent. In a short sale situation, all of those parties in addition to the seller’s loan servicer, a housing counselor, any junior lien holders, mortgage investors, and insurances may be involved too.
With so many parties involved in a short sale, the process can be difficult to complete without a qualified ATTORNEY and REALTOR to help guide you and act as a liaison between all of the parties involved. You will want the advice and expertise of an ATTORNEY who has your best interests in mind and who will expedite the short sale transaction. It is essential to have an ATTORNEY who will not allow you to miss a detail that could delay closing the transaction in a timely manner and to the specifics required by all parties involved. A qualified REALTOR with experience in short sales will also be able to find a buyer to complete the transaction. Homeowners agreeing to a short sale should also consult a tax expert and obtain the services of an ATTORNEY to help protect themselves from any future claims by the lender.