What is a Short Sale?
Short in this case does not necessarily refer to a time element. A short sale is when the market value for your house is less than the amount you owe. For example, if the market value for a house is $100K, you may owe $90K on your mortgage and another $15K in back taxes and other liens. This is a short sale situation.
There are a lot of benefits to a short sale, and several reasons you might consider one. The number one reason to consider a short sale is to have more time in the house. Normally after a foreclosure auction, the previous owner needs to leave within 30 days. That can be a tight squeeze for moving out of a home you’ve been in for a while, not to mention finding another place to go. Secondly, when you do a short sale you can buy another house much sooner than if you let it go to foreclosure. Speaking of foreclosure, the third reason to go the route of a short sale is to avoid having a foreclosure on your record. The last benefit is that in a short sale the owner is eligible for seller incentive money.
A short sale offer will have a higher probability in getting accepted if the house needs repairs.
If you’re upside down in your mortgage – where you owe more than what the house is worth – a short sale is a good way to get out of a sticky situation. The other option is usually foreclosure, which nearly ruins your credit and therefore prevents you from getting another house sooner rather than later. You want to avoid foreclosure at all costs, and selling short demonstrates to the powers that be that you took ownership and control of the situation the best way you could. There will still be a negative impact on your credit, but the terms of that impact are far less severe than foreclosure.
If you’re upside down in your payments or behind and need to move for whatever reason, you probably don’t have the extra cash to pay a realtor and all the fees that come with that like closing costs. Often people find themselves in these situations when they didn’t put very much money down on a home and a shift in the market has impacted their ability to pay or caused the value of their home to plummet.
The Short Sale Process
Here’s how a short sale works: First you are going to need somebody on your side like Reddtrow to help you handle the proceedings and paperwork. You will have to prove your financial hardship to the lender; that is, you’ll need to prove that you cannot afford your monthly payments. You must be at least 30 days late on your mortgage and qualify for a short sale. To prove you qualify you might need to provide financial records, proof of your income, or a notice of impending foreclosure. A short sale realtor will list the house so the bank can get as many offers as possible. The offer will be negotiated until an agreement is reached. Once the offer is accepted, you can get ready to close.
If you have questions about the short sale process, would like to get a competitive offer, or you’re interested in finding the best short sale expert, we can help. Call Reddtrow and get your home sold fast.
Author: Sandra Nesbitt