About Short Sales
You DO have options
If you have become delinquent on your mortgage(s) you will receive tons of information some not so subtle suggestions – from many people who want to take advantage of your temporary misfortune. They will attempt to scare you by telling you that time is your enemy and that you must act immediately to save your credit. This will normally be followed by a proposal to solve your problems by suggestions that you sell or deed your property to them.
BEWARE! Don’t do anything until you understand ALL of your options.
Here are some of your options:
Refinance
· You can refinance the property and pay off existing loans. However, you must have sufficient equity in the property. I work with lenders that can assist you with refinancing your property.
Sell Your Property
· You can sell the property if you have the equity in your property and can afford to wait out the time it may take to currently sell your home at a fair market value. As a full service real estate professional, I can assist you with the sale of your property.
A Short Sale
· If you owe more than the home is worth, you can look at negotiating discounted payoff with your mortgage company. I can negotiate with the lender(s) on your behalf to get an approval for a Short Sale. Keep in mind that the lender(s) almost always pays all the sales cost, including title and escrow fees, commission and most repairs.
Negotiate a Forbearance Agreement
· Negotiate a Forbearance Agreement with your lender(s).
For borrowers who have experienced a temporary event that has caused them to fall behind on their mortgage(s), a forbearance Agreement with the lender(s) is a viable option. In most cases, the lender(s) look(s) for two things when considering forbearance agreement:
1. Why the loan became delinquent in the first place. It helps greatly if the problem was something beyond the control of the borrower – serious illness or injury, temporary disability or a one-time disruption in income.
2. That the borrower’s financial difficulties have been corrected. The mortgage company wants to know that the borrower is now on a solid footing and can be counted upon to make regular loan payments as agreed. The new payment will probably include a set amount that will count toward the delinquent amount.
Do absolutely Nothing
· This is always an option but not recommended. Many borrowers can become overwhelmed and intimidated by their situation and although it is a daunting burden the ramifications of a foreclosure are very serious. That being said, at the very least you owe it to yourself to consider the potential solution that helps you avoid foreclosure.
How Does It Benefit the Seller?
A “Short Sale” offer significant benefits to the homeowner, such as:
1. A short sale will allow the homeowner to eliminate the mortgage debt(s) without the expense of needed repairs to get the property sold.
2. The seller is able to stay on the property until the process is complete.
3. No upfront fees are required. DO NOT PAY UPFRONT FEES TO ANYONE!
4. Closing cost and commissions are paid for by the lender(s).
5. The seller avoids the negative effect of a foreclosure on his/her credit report.
6. May help avoid a bankruptcy.
7. Less stress, more Peace of Mind!
How does it Benefit the Lender/Bank?
For the mortgage holder there are real advantages to getting the property sold, even at a discount, which the borrow is still in the home,
1. The cost to maintain the property are paid by the borrow and the borrow has an incentive to keep the property in good shape.
2. The foreclosure process can get very unpleasant, particularly toward the end of the process.
3. The lender(s) avoids paying the considerably high fees associated with a foreclosure such as; attorney, court, processing and handling fees. Not to mention the insurance, taxes and repair cost.
Bottom line, banks DO NOT want to own your home!
How Does It Benefit the Buyer?
Buyers are able to purchase a property, in most cases, substantially below market price resulting in immediate equity. These properties are typically much better maintained than a foreclosure property and in need of fewer repairs.
The Short Sale Process
1. Get prequalified. Find out if a Short Sale is a viable option. I can help you with this and there’s NO COST to you.
2. The property is placed on the market.
3. The Hardship Package is prepared and submitted to the lender(s).
4. Once an offer(s) is received, it’s submitted to the lender(s) for approval.
5. Upon approval, the file moves to closing.
Why Work with A Realtor?
A. Lender(s) prefer to work with a REALTOR as opposed to working directly with the buyers. Getting a Short Sale approved by the existing lender(s) is a very complicated multi-step process. This requires a high level of patience, persistence and most importantly, experience. The lender(s) realizes that it is in their best interest, as well as that of the borrower, to have the Short Sale file put together properly from the very beginning, by a real estate professional that does not have a conflict of interest.
B. PROTECT your personal information, that’s why you don not want the buyer working directly with the lender(s). Why? In order to get a Short Sale approved you must provide the lender(s) with a great deal of personal financial information and documentation. Do you want the buyers to have access to all this information?
C. The buyers are concerned with closing the deal in accordance with their best interest NOT yours.
D. Professional Representation, at NO COST to you – The lender(s) pays the real estate commission, so professional representation is free to you. In essence, the lender(s) pays the real estate fees, along with most other sales cost, so the Short Sale file can be handled by a professional.
If you decide that a Short Sale is the best option for you, make sure that a highly qualified Real Estate Professional, such as me is representing you.
