What is a Short Sale?
A short sale in real estate occurs when the outstanding obligations (loans) against a property are greater than what the property can be sold for. If a homeowner owes more than what the home is worth, or has very little equity in their home, a short sale may be negotiated with the lender in order to avoid foreclosure. In some cases, a short sale may be possible even if the homeowner is not facing foreclosure. A short sale eliminates the homeowners debt and gets the property sold.
***** SCAM ALERT *****
Please Beware, you may be contacted directly by a variety of companies or individuals that want to "help" you with your current financial situation. Some of these are reputable and others are only looking for financial gain at your expense.
DO NOT ADD SOMEONE ON TO THE DEED OF YOUR HOME!!
Some investors try to convince homeowners that the investor needs to be added to the deed in order for them to get a short sale approved. DON'T DO IT! It would allow the investor to take partial ownership of your property AND control any profits generated from their efforts. You will still be responsible for the mortgage note and be vulnerable to potentially serious legal, tax, and financial consequences. You need to protect yourself from any future events.
PLEASE SEEK THE ADVISE OF A REAL ESTATE ATTORNEY
AND A TAX ADVISOR.
Also never pay someone an upfront fee to help you with credit counseling or negotiating with your lender. These services are available from many credit counseling agencies at absolutely no cost to the homeowner. You may contact me for a FREE list of agencies.
Who qualifies for a Short Sale?
A short sale is possible if a homeowner has suffered a hardship and needs to sell the property. Some hardship examples include a loss of job or income, medical expenses, divorce, relocation and other life-altering occurrences. The homeowner must present a legitimate reason for needing to sell in order for the lender to agree to sell the home now instead of waiting until the market recovers. In certain instances, the borrower does not need to be behind in their mortgage payments for a Short Sale approval.
Why would a lender agree to a Short Sale?
From the lender's perspective, a short sale saves many of the costs associated with the foreclosure process - attorney fee's, the eviction process, delays from borrower, bankruptcy, damage to the property, cost associated with resale, etc. Lenders know they could lose a lot more money if the property goes to auction and that they would be better off taking the discount beforehand and be finished with the property. Therefore lenders are willing to accept less than the full amount due on the loan. In turn, this provides homeowners the opportunity to avoid or minimize the damaging affects of a foreclosure.
Call Winona today for a FREE Consultation 970-986-0939