A short sale is when the lending institution accepts a discounted payoff amount on an existing mortgage and agrees to help the homeowner with closing costs to prevent a home from going into foreclosure. Often times a homeowner owes more than can be collected through the sale of the home. In this case, a short sale allows them to sell the property to avoid foreclosure for themselves and the lender.
Often times a homeowner owes more than can be collected through the sale of the home. In this case, a short sale allows them to sell the property to avoid foreclosure for themselves and the lender. The lender typically gives consideration to a short sale when the homeowner experiences hardships like:
Short sales are uniquely beneficial to all parties involved: homeowners, lenders, real estate agents and investors alike. By accepting a short sale, the lender decreases their potential for loss and reduces the time to receive payment by a number of months. A short sale also minimizes the costs associated with foreclosures by the lender. Homeowners avoid permanent damage to their financial record while buyers benefit from a good deal on their home.
Real estate agents are compensated for their work to get the property sold and investors, when involved, can receive an increased payback on their investment by making improvements to the home and later selling it at a price that matches its increased value. The key to the short sale process is timing.
When a homeowner fears that foreclosure is imminent, they should immediate contact us. Foreclosure proceedings typically start with a formal demand for payment in the form of a Notice of Default letter. Although timing of this notice varies by state, the lender typically issues it when the homeowner is three months delinquent on mortgage payments. Ideally, we should be contacted after one payment is missed and you have no means to make subsequent payments.
Also, in many instances, lenders have what is known as a Pre-foreclosure Sale (PFS) Program. This program allows the homeowner in default to sell his/her home and use the net sale proceeds to satisfy the mortgage debt even though these proceeds are less than the amount owed.
We can quickly assess your situation and see how the short sale process can be put to work for you.