Short Sale
For some clients, selling their home is actually the relief that they need. After reviewing your financial portfolio, it may become obvious that you can no longer afford your home. Many owners have often realized this and tried unsuccessfully for months to sell their home through traditional real estate methods.
But, because of market fluctuations and changes beyond your control, sometimes your home may not sell at the anticipated full price of your loan. A Short Sale allows you to sell your home to a third party at a price which is less than the total amount that you owe.
What is a Short Sale?
A short sale is when a lender accepts a discount on a mortgage to avoid a possible foreclosure auction or bankruptcy. Instead of buying from a seller, the house will be purchased directly from the lender for a discount. For example: A homeowner, who is facing foreclosure, has an existing first mortgage of $300,000. An offer is written to the lender for $220,000, which is accepted as full payment for the loan. This is a short sale. Why are they willing to take such a discount? Several reasons. First of all, banks do not like excess inventory and bad loans on their books; therefore, if they see an opportunity where they can sell the property without a huge loss, they will do it. Secondly, lenders know they could lose a lot more money if the property goes to auction. There are so many fees involved if the property goes to auction, that they would be better off taking the discount beforehand and be finished with the headache of it all.
Your lender will use the proceeds from the sale to pay off the mortgage and the remaining balance will be negotiated or perhaps even forgiven. This avenue is open for homeowners who are willing to part with their property and keep negative reports on their credit rating to a minimum.
Negotiating a Short Sale with the lender is a difficult process, generally because it is very hard to find the bank officer who has the authority to accept a discount. Much like getting your phone bill corrected, you can expect the process to involve a lot of waiting on hold and being bounced around an intricate maze of automated voice mail systems. Once you get in touch with the right person, then the hard work and the negotiating can begin.
Are you having financial issues in these hard times, please call or email me. If you are behind a few payments on your mortgage or even if you are not yet behind but know that you will not be able to make your payments in the next month or so, I should be able to help you out as well.
Richard Bothwell, Realtor,
For all your Real Estate Needs: Selling or Buying a House?
Phone: 214-336-3600
Email: bothwell13@verizon.net
