What is a Short Sale?
A short sale in real estate is when a lender allows a homeowner to sell their home for less than the debt owed on the mortgage. By working with the right listing agent, many homeowners are able to have all their debt forgiven.
Short Sale Vs. Foreclosure
A short sale is the best option for many homeowners who are underwater on their mortgage payments, and have been unsuccessful getting their loan rates refinanced or reduced to an affordable rate. In both a short sale and a foreclosure the property is lost, however, a short sale only affects one’s credit for two years. A foreclosure, on the other hand, will negatively impact your credit for seven or more years. Another benefit of a short sale is that many banks and government programs offer financial assistance with completing the sale and moving costs. Those who are foreclosed on don’t receive that type of assistance.
Hire A Qualified Short Sale Agent
Choosing the right short sale agent is imperative. Their job entails much more than slapping the listing into MLS and throwing up a For Sale sign; they will be handling negotiations with the bank. If the short sale agent has inadequate experience dealing with loss mitigation and negotiators, the seller will be the one who suffers in the long run.
An experienced agent will be much better suited to negotiate with a lender, because not all lenders handle short sales the same way. The right agent can assure that you will pay little to nothing when selling your home, and their sales commissions are paid by the bank, not the buyer or seller.
ShortSaleAgentFinder.com allows you to search for the closest short sale agents in your neighborhood, and view and compare their short sale profiles, so that you can make an informed choice when choosing who to work with.
WHAT IS A SHORT SALE?
A short sale happens when a homeowner owes more on his mortgage than his home is worth in today’s fair market value. Therefore, the home is underwater, or upside down. A homeowner’s real estate agent then negotiates with the owner’s bank to accept less than the balance of the mortgage. For example, if a home is only worth $400,000 but the owner has a mortgage balance of $500,000, then he will be $100,000 “short” when he goes to sell his home.
DO I QUALIFY FOR A SHORT SALE?
In order to qualify for a short sale, you must show that you are experiencing some kind of financial hardship. For example, if your income has dramatically dropped, or you have lost your job, or you are a few payments late on your mortgage and having trouble keeping up. In other words, if you’re on a steady road to foreclosure, then you are very likely a perfect candidate for a short sale. Also, the home must be worth less than the balance of your mortgage.
WHAT IS THE SHORT SALE PROCESS?
The first step in pursuing a short sale is speaking with a knowledgeable short sale agent who can run a home evaluation of your property and determine if you qualify for a short sale. Next, your home will be marketed for sale, and buyers will present you and your agent with offers. You will accept the highest offer and your agent will submit that offer, along with your short sale application to your lender. The process can take anywhere from 1-4 months, depending on your lender. In many cases, you can complete a short sale with little or no cost out of pocket. This is why it’s so important that you work with a short sale specialist, and not just any agent you know.
WHAT ARE THE BENEFITS OF A SHORT SALE?
There are so many benefits to doing a short sale compared to the alternative of being foreclosed on. For starters, when you go through a successful short sale, your credit is only affected for around two years. That means you can rent for a couple of years and then you can buy another home and you’re right back to home ownership. If you are foreclosed on, that hits your credit very hard for around seven years! Also, many banks are now offering homeowners move out financial assistance to cooperate with the short sale, which means they will sometimes pay you to move. Don’t expect that kind of treatment with a foreclosure proceeding.
MORE INFO ON YOUR SHORT SALE
Since every situation is different, we recommend you speak to a short sale specialist that works your market area. Every state has different rules and tax implications. Consult short sale specialist to see if a short sale is right for you.
The Process for Buying a Short Sale Home
SHORT SALES WORK A DIFFERENT WAY
Purchasing a short sale is very different from buying a regular traditional sale. The main reason is because in a short sale, the market value of the home is less than what is owed to the seller’s lender. During a short sale transaction, the brokers negotiate with the lender to accept a “short” payoff on the loan, and in most cases, forgive the debt altogether. Buyers should be aware that completing a short sale purchase (closing escrow) can take anywhere from 1 month to 6 months or more, depending on the holders of the liens. For example, if the seller only has one mortgage, it is much easier than if he has two mortgages, since each loan has to be negotiated down separately. That’s why working with an experienced Short Sale expert agent is so important.
WORK WITH A QUALIFIED SHORT SALE SPECIALIST!
Short sales require some extra skills from the real estate agents handling them. Every bank has their own procedures, with different documentation they require. Working with an experienced agent is a sure way to increase your chances for success. A qualified short sale agent has experience negotiating with bank managers on your behalf, and can make your case stronger, helping you secure the best possible price.
Short Sale agents across the country are a special breed of specialized real estate professionals who can help you short sale your home with the least amount of hassle possible. This is because they understand the process the banks expect to close short sales quickly and successfully. Not every transaction is the same, and this could not be more true in the short sale world. Many properties have both a first and second mortgage, HOA liens, mechanics liens, and unpaid taxes among other issues. To get these properties to a successful closing with clean title often requires the help of a dedicated short sale agent.
The key is also to work with somebody that understands each bank and their expectations. Your agent should know exactly what kind of a package to put together for each bank involved in the transaction. Bank of America is going to expect something different from Chase or Wells Fargo. There are so many details involved that it is usually a bad idea for a home owner to take on the job of negotiating their own deal. In fact, those looking to buy short sales should be wary of doing business with a seller that is not open to using a professional short sale negotiator because it will usually lead to frustration or even worse. There is a reason that there are high level short sale certifications and other industry designations. It is because this is a tough job only meant for those who are true students of the art of closing short sales.
The featured members you see in this short sale are people that have made a personal commitment to giving the short sale industry a good name and serving the best interests of buyers and sellers. These are high level people dedicated to their craft. With short sales on the rise and foreclosures on the decline, it will be more important than ever going forward with those individuals that have the expertise and experience needed for an efficient and strain line short sale service. (DRE#01379670)
