A short sale is the sale of a property for less than what the owner still owes on the mortgage. It is an alternative to foreclosure when a homeowner needs to sell and can no longer afford to make their mortgage payments. The lender agrees to accept less than the amount owed to pay off a loan now rather than taking the property back by foreclosure and trying to sell it later. Lenders will agree to a short sale because they believe it will net them more money than going forward with a lengthy and costly foreclosure process.
A short sale can be a tricky process and if not handled property can leave a homeowner owing tens of thousands. A short sale should be handled by a
experienced real estate broker who has substantial knowledge and experience with the short sale process along with a strong record in negotiating short sales. I handle and negotiated my first short sale over 26 years ago 1990.
If you qualify for a short sale it is most likely the best option. Each sale is
different however more times than not your credit rating is not damaged as bad as a foreclosure. Often you can qualify for a new home mortgage sooner. This link to Fannie Mae should help.
No two short sales are alike. That being said basically the criteria for a short sale is a need to sale because;
- You owe more for your home than the property is worth.
- You have some type of financial problem preventing you from making payments.
(Examples job loss, divorce, death in family, medical emergency or illness.)
No unless authorized through a federally sanctioned program such as HAFA. Sometimes a lender will allow some relocation money but not for certain.
The short sale process is complicated and time consuming. It can take several weeks if not months to get the mortgage company to sign off on it. Most lenders have a chain of command that a contract must go through and approved at all levels.
No, sometimes the foreclosure process has gone to far. The lenders may have already started the foreclosure process have to much time and money invested (attorneys fees, court cost, etc…) THAT IS WHY IT IS BEST TO ADDRESS THINGS EARLY ON. Just because a lender has started the foreclosure process does not make it to late to try a short sale. Lenders prefer not to foreclose. If a short sale is presented as a good alternative very often they will put the foreclosure on hold and try a short sale.
Here is where it gets sticky and you need a experienced real estate broker to help you. Short sale is exactly what it implies you are selling your home for less than you owe. However the note is not satisfied. The advantage of the short sale allows you to sell your home rather than be foreclosed on. The disadvantage is the remaining unpaid balance is still owed. The unpaid balance on the note is called the deficiency. More times than not I have been able to negotiate complete satisfaction of the note and no option for the lender to pursue after closing.
A 2nd mortgage can request 10% or $12k whichever is greater of funds at closing. Where the difficultly comes in the 1st mortgage does not have to agree to give up these funds. At that point we need to talk with 2nd Mtg.
Call us and lets go over your situation I can probably help. WE WILL NOT PAINT YOU A PICTURE WE CANNOT LIVE UP TO….. GUARANTEE.
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