Woodstock GA Real Estate Happenings…

March 9, 2010

What is a Short Sale and Is It For Me? | Help for Homeowner’s!

Foreclosure Next Exit!

Lately I have had numerous people ask me if they should try to short sale their home. You might be a good candidate if you can no longer afford your home and your home’s value is less than what you owe.  Short sales have saved many people from foreclosure thus saving lenders hundreds of thousands that they would have lost with the alternative ~ Foreclosure!   That being said, do you need  to short sale your home? Can you short sale your home? Would you even want  to try to short sale your home? Lets see….

What is a short sale?
A short sale is when your lender(s) agrees to take less than what is owed on your home upon the sale of your home. The professional definition: A short sale is when a mortgage company accepts a discount on the note to avoid a possible foreclosure action. Instead of buying from a seller, the property is purchased directly from the lender for a discount. When a homeowner can’t meet their financial obligations on the property lenders are sometimes willing to accept less than the full amount due, commonly referred to as a “Short Pay” or “Short Sale“.

Here are some of the basics that you should know prior to making the decision to try to short sale your home:

  • Most lenders will not typically agree to a short sale unless your loan is in default (you have missed one or more payments). So if you are not behind on your payments chances are that they will not consider your home for a short sale.  This does vary from lender to lender so you will want to talk to your lender and/or an experienced REALTOR® (who can contact your lender) to find out your institution’s practices.
  • If you are so far behind on your payments that your lender has begun the foreclosure process, it is probably too late (but not always). Some lenders have been known to hold off on the foreclosure and auctioning your property if you already have a buyer, a binding purchase and sale agreement and have already submitted all short sale documentation, but are simply waiting for an answer.
  • You have to be able to prove hardship. A REALTOR® who knows short sale procedures can tell you what you need with regard to your hardship letter, budget and required documentation.
  • Typically your lender will not tell you how much they will accept until you submit a binding purchase and sale agreement for the sale of your home combined with a short sale package and it is either accepted or rejected.
  • It could take 6 months or more to get an answer from your lender after submitting a binding sales contract, your short sale package and all required documentation. If you are already behind on your loan, your home could go into foreclosure before a decision is made with regard to the short sale. Also, you could lose your buyer if it takes too long as buyers get anxious and can decide to terminate and move on to the next property.
  • You could have adverse tax effects with short selling your home. You need to consult an accountant prior to listing your home for short sale to find out if short selling your home will affect your taxes.
  • Your lender could try to make you pay the difference between what you owe and the amount they agree to accept. Get a good REALTOR® who knows how to negotiate short sales and knows the special stipulations to put in the contract to assure that this doesn’t happen to you! Your lender may not accept the special stipulation, but at least you are not bound to the agreement, nor to pay back this amount.

Some other helpful information you should read:
Hardship Letter | Imperative for Negotiating a Short Sale
Short Sale Package | Standard Items Needed

All of this may sound quite difficult to you, but let me assure you that there are MANY cases where Homeowners are able to short sell their home and were able to walk away with their desired results based on their circumstances. Feel free to contact me with any questions you might have. I would love to give you all the facts based on your situation so you can make an informed decision!

Kind Regards,
Michelle

Michelle Miller, REALTOR®, ABR®
RE/MAX Town & Country of Woodstock, GA
Direct: 404.538.5396 Email: michellekmiller@comcast.net
www.bestgahomesforsale.com

RE/MAX Town & Country of Woodstock
Million Dollar Producer, Executive Club

 

Advertisements

2 Comments »

  1. I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you down the road!

    Comment by Tony Orlando — August 23, 2008 @ 4:44 pm

  2. Short sales are the hottest thing in real estate investing today. Not only is there I huge potential for profit, but you are helping people avoid bad financial situations as well.
    Jon Christopher of Short Sale Way

    Comment by Jonathan Christopher — August 25, 2008 @ 1:01 am


RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: