5 Short Sale Frequently Asked Questions

Short sales are complicated and many short sale transactions fail. According to some estimates, 49.4% of short sales fail, compared with 17.9% for foreclosures and 13.1% for traditional sales. Yet there are benefits to having a short sale as opposed to foreclosure or deed in lieu where the bank recovers your house.

First, short sale is a way to avoid the stigma of foreclosure. Also, by going through a short sale, sellers can avoid to come up with thousands of dollars to make up for the difference they owe on mortgage. That is, federal government aids facilitate the lender forgiving the balance on the loan for a short sale seller.

Are you considering a short sale? Here are the five short sale frequently asked questions and their answers.

  1. Can any real estate agent handle a short sale?

No. As mentioned above, short sales are complicated. More than any other real estate transactions, you need a qualified professional. You need an agent who has successfully completed many short sale transactions, someone who is a very good negotiator. Not all real estate agents are qualified to handle the complex short sale process.

  1. Why should I choose short sale over foreclosure?

In many cases, a short sale is more beneficial than a foreclosure. And it’s not only about your credit but foreclosure can bring with it a social stigma which you will want to avoid. Here are the perks of short sale over foreclosure:

  • Short sale will affect your credit. But the effects of foreclosure on credit lingers more than that of short sale. Also with short sales, you will be presented with more options whenever you want to reenter the market.
  • You are in control of the sale, not the bank. You can sell your house to whomever you wish to sell it to.
  • Depending on tax laws in your area and your circumstances, banks will forego the balance you’re supposed to pay after selling your house in a short sale.
  1. How do I know if I qualify for short sale?

Basically, to qualify for short sale, you need to fulfill the following conditions:

  • You owe more on your mortgage than your home is worth
  • You’re willing to sell
  • You have a financial hardship that’s making it hard to make payments

These are the basics. You need to speak with an attorney or real estate agent to know what applies in your area.

  1. Will I get any money from the sale?

Since the lender is the one taking a loss, don’t expect to get anything from the sale unless specifically authorized by federal programs such as HAFA.

  1. How long do short sales take?

This is probably the most common of the short sale frequently asked questions. Short sales require great deal of patience. It can take weeks, maybe even months. And it’s important you work with a realtor who has completed many deals and knows the bank’s requirements. Also, you should be ready to present any required document on time.

 

6 Tips for Requesting a Short Sale

Having to sell your property or home in a short sale is a typical alternative option to keep away from foreclosure in the event that you are owing more money on your property or home than the worth of the property or home. Individuals can end up getting into mortgage payment for reasons like a financial hardship. A great approach to getting out of this financial jam is short sales. Some of the tips for requesting a short sale include

  • Know the amount you owe

When you begin this procedure, it is basic that you know the aggregate amount of any home loans or liens on the property. Your home loan lender has a portion in your home and they have to endorse the short sale.

On the off chance that your mortgages or home loans are with a similar lender, it will just require their endorsement. In any case, having two separate lenders for various home loans or mortgages relates to the fact that, a unanimous approval will be required. Once they have come to an agreement, the lender then sets the amount they will let the home be sold for.

  • Get a decent buyer

Your optimal purchaser might be somebody who will hold up quietly until your lender endorses your short sale and, when that happens, the purchaser will rapidly close the deal. These qualities are honestly hard to prescreen for, yet do as well as can be expected.

Before going into a sales contract with a potential buyer, try as much as possible to verify if such a person is capable of buying the home. You can get an approval letter, the source of down payment, credit report, etc. Do this in order not to get disappointed at the end of the day.

  • Have the appropriate documentation

Since the lender is not under any condition required to consent to your demand for a short sale, it is brilliant to assemble a proposition specifying why a short sale is the best alternative for both sides. You ought to put together all of your significant monetary records, with a letter showing reasons for your short sale request or financial hardship.

  • Adopt a proactive strategy

In spite of the dreary realities, deciding to sell in a short sale may get you out of a terrible circumstance. However, a commitment of effort and time may be required on your part. Adopting a proactive strategy to your short sale may help you escape that bad situation as fast and effortlessly as you can.

  • Information is Key

A short sale is usually a first-hand experience for most property or homeowners. However, the key to being successful is knowledge. You ought to know the upsides and downsides of a short sale, including the credit, expense, risk, and other potential outcomes.

You ought to consider whether any other options to a short sale are more appropriate and doable for your circumstance. You ought to likewise understand the general process of short sale.

  • Hire the services of a Professional

In the event that you are uncertain about how to advertise your private property for short sale, hire the services of an expert who has enough experience with cases like that and is able to guide you through.

As someone making an attempt of a short sale, you need to be at the highest point of your game. A short sale can be tedious, yet with the above tips, you have a higher chance of having a success.