A lender approved, preforeclosure short sale is a real estate transaction which occurs when anticipated proceeds from the sale of a home are insufficient to payoff all lien holders in full. The lien holders agree in writing in before the home sale is complete to facilitate the sale by accepting less than it is contractually due, though it is under no obligation to do so. The sale of property at a fair market price may be lower than the loan balance; this is referred to as being "upside down" in your home or mortgage. A short sale can be an excellent solution for homeowners who need to sell, and who owe more on their homes than they are worth. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders have become much more negotiable when it comes to these transactions. Recent changes in corporate policy and the Obama administration have also improved the chances of getting a short sale approved. Here's a more official definition of a short sale: - A homeowner is 'short' when the amount owed on his/her property is higher than current market value.
- A short sale occurs when a negotiation is entered into with the homeowner's mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then 'sold short' of the total value of the mortgage.
For homeowners to qualify for a short sale, they generally must meet any or all of the following circumstances: - Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
- Monthly Income Shortfall – In other words: "You have more month than money." A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
- Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.
This seems simple enough, but it is a complicated process that takes the expertise of experienced professionals. I hold the CDPE® Designation (Certified Distressed Property Expert) and am ready to identify all possible options and, when possible, assist in the quick execution of a short sale transaction. If you have questions or feel you may qualify for a short sale, please contact me for a free consultation. Additional information on short sales can be found by CLICKING HERE. Understanding your options now could mean all the difference in the world. Please call today for your no cost, confidential consultation. It is best to seek professional advice, each situation is different as are the requirements of each lender. I am experienced in handling these type of sales and negotiations and hold CDPE designation. |