REO Main Menu
Blog Topics
Categories
Short Sales
What is a Short Sale?
Contact Information
Anna Yang
SHORT SALE EXPERT
Broker Associate
Direct: (909) 282-7307, Fax: (909) 992-4050
E-Mail:annaY@socalREO.com
Key Asset Solutions REO
The Short Sale
Do you need to sell your home? Are you ready to sell your home? Friends, family, or even a real estate professional may have discussed “short sales” as an option. They might not have fully discussed what short sales consist of. This brochure will give you a detailed overview about short sales. After reading this brochure you will know what a short sale is, if it is the right solution for you, what the benefits are, and the consequences of a short sale.
Important information you need to know when making the decision to sell your home. Is this the right solution for you?
Who Benefits from Short Sales?
Short sales are a win-win situation. Home Owners, Lenders, and Realtors all benefit from the successful short sale. The Lender gets the majority of its money back, Home Owners get the relief they need and are able to sell their property and avoid foreclosure, and Realtors can facilitate the transaction and receive compensation from the sale of the property.
Banks have the option of submitting the short sale to the credit bureau as “Paid in Full” or “Settled for less than full balance.” There is no evidence to support that a short sale will lower your credit score. If you are currently behind on your mortgage or facing foreclosure, the short sale will actually help your credit! Once you are approved for the short sale, all collection activity will STOP and you will avoid a foreclosure. What is a Short Sale?
Why would banks forgive the difference?
ü Impending Divorce – unable to afford payments alone after divorce. ü Illness – unable to work and make payments ü Unemployment – inadequate income for payment ü “Hardball” – anyone who no longer wants the property and accepts all consequences Why not the lender foreclose?
Even if the lender sells the property through foreclosure, this may NOT remove your obligation to repay the remaining balance. The financial obligation does not disappear!
What if my home is already in foreclosure?
Your foreclosure sale will usually be suspended during the short sale process. Work with a professional Realtor you can TRUST…
How will it affect my credit?
In the world of Real Estate, a short sale refers to the sale of real property for and amount less than the amount owed on the property. In the short sale scenario, the bank agrees to accept less than the full balance due on the debt, and usually ‘forgives’ all or a large portion of the difference.
For example: a seller might have a loan balance of $100,000 and a buyer willing to pay only $80,000. If the bank accepts the offer, he has agreed to “short sell” the pay off, down $20,000.
To mitigate their losses, banks often accept a settlement of less than what is owed on the property. When faced with the option of getting the property ‘back’ through foreclosure, a short sale is often a much wiser business decision for the bank.
Note: There must be a willingness for the bank to negotiate this type of arrangement.
Who & what situation qualifies?
Proof of hardship is mainly the one requirement for qualification of a short sale. Hardship does not necessarily mean financial. Most common are:
Read More