Short Sales Explained
A short sale can be an excellent
solution for homeowners who need to sell, and who owe more
on their homes than they are worth. 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. Recent changes in corporate policy and the
Obama administration have also improved the chances of
getting a short sale approved.
But to be technical, here's a
more official 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.
For
homeowners to qualify for a short sale, they must fall into
any or all of the following circumstances:
1. Financial Hardship – There is a situation causing you to
have trouble affording your mortgage.
2. Monthly
Income Shortfall – In other words: "You have more month than
money." A lender will want to see that you cannot afford, or
soon will not be able to afford your mortgage.
3. Insolvency – The lender will want to see that you do not
have significant liquid assets that would allow you to pay
down your mortgage.
This
seems simple enough, but it is a complicated process that
takes the expertise of experienced professionals. I hold the
CDPE® Designation and stand ready to identify all possible
options and, when possible, assist in the quick execution of
a short sale transaction.
If you
have questions or feel you may qualify for a short sale,
please contact me for a free consultation.
Understanding your options now could mean all the difference
in the world. |
