Avoid foreclosure or worse by selling your home through a short sale.
Short Sale: What Should You Do?
Options for financially stressed homeowners: When a home-owner sells their home for less than the amount still owed on their mortgage.
If your lender agrees to do a short sale, they'll sell your home for less than the remaining balance and then recoup the difference from you.
Read On To Learn About:
Is A Short Sale A Foreclosure?
Pros And Cons Of Short Sales
How A Short Sale Works
Options For Selling Through A Short Sale
Is A Short Sale A Foreclosure?
Short sales and foreclosures are similar in mortgage debt circumstances but they are two different processes.
A short sale is sometimes called a “pre-foreclosure”. Instead of being forced to foreclose and evict the home, a homeowner can request a short sale, which prevents foreclosure.
Pros And Cons Of Short Sales
Benefits of a Short Sale:
Avoid Foreclosure
Less impact on your credit score
After the sale, your loan will be settled
No sudden evictions (you have a say in the timeframe)
Discreet process
You can buy a new home in the future
Disadvantages of a short sale:
Potential tax consequences
Can take a long time
Requires lots of paperwork and responsibility
No guarantee your lender will approve your short sale request
How A Short Sale Works
When you're too behind on mortgage payments, a short sale might be your best option. Here are the steps you need to go through.
1. Send a short sale request to your lender. Your lender isn't obligated to agree to a short sale, so you should request it only as a last resort when you can't make any more payments. Contact your lender's loss mitigation department and ask questions.
2. Get ready to sell. If your lender agrees to the process, create a short sale proposal. Make sure you get a real estate agent and any professionals needed for the process, like tax experts or lawyers.
3. If your lender agrees to do a short sale, they'll sell your home for le List your short sale. Set the price. Remember: it won't be as high as its market value.
4. Find a buyer. A lot of paperwork is required to give buyers the information they need to purchase a short sale. This includes proof of hardship, bank statements, medical bills, etc.
5. Submit your proposal. Once your buyer gives an offer, you need to submit your proposal and the buyer's offer to your lender. It helps to have a real estate agent help you through the process.
Options For Selling Through A Short Sale
You can't complete a short sale alone. Consider your options:
Contact your current mortgage servicer and tell them you are interested in a short sale and want to know if you are eligible.
Explain your financial hardship, some homeowners face illness-related medical bills or lose their source of income.
Contact a real estate agent that specializes in short sales. They can work with your lender, buyer, and bank.
Know whether or not you live in a non-recourse state, which is a state that cannot collect deficiencies after a short sale.
Although a short sale isn't ideal, it's a great way to save you from foreclosure. Homeownership is expensive, and many situations cause inescapable debt. Let a real estate agent help you through your short sale process so you can save money and get back on your feet, with the option to buy a home again in the future.
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