Short Sales in Palm Coast & Flagler We can help you find or sell your foreclosure!
If you can no longer make your mortgage payments and your home is now worth less that what you owe on it, short sale or foreclosure may be your only option.
A SHORT SALE - in which the lender allows the sale of a home for less than what it is worth and forgives the rest of the note - this provides another alternative for homeowners.
It is a WIN-WIN-WIN situation for seller, buyer and lender:
*Seller gets out of mortgage liability without facing bankruptcy
*Buyer gets the home at a reduced price
*Lender agrees to a loss it considers minimal without waiting through a foreclosure and being stuck with property that will not sell.
What is a Short Sale?
How do you sell a property if it's worth less than the mortgage balance?
In real estate, a Short Sale is a transaction that occurs when a bank or mortgage lender agrees to discount a loan balance due to an economic hardship on the part of the mortgagor.
Extenuating circumstances delegate whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market (value) and the individual borrower's financial situation.
The Short Sale is typically performed in order to prevent an actual foreclosure. Often a bank will choose to allow a short sale if they believe that it will result in a smaller financial loss as opposed to foreclosing.
Why does it take so long for a short sale to close?
A normal real estate transaction can close at will once the contract is fully executed. In the short sale process, all agreements are "subject to the approval of the lender". Since the seller is requesting a discounted payoff from the lender / lien holder all parties must allow the lender to complete an evaluation to determine if the loss is justifiable. The lender wants to mitigate their losses and so the process can delay closing for several months.
Why would the lender agree to take a loss on real property?
Lenders are in the business of lending out money not acquiring real property. Going through the complete foreclosure process can cost the lender up to $50K in fees. Lenders can mitigate losses and reduce expenses by selling the property pre-foreclosure / short sale.
Who is eligible for a Short sale?
In order to get your lender to accept less or consider a short sale you need to prove a hardship. Hardship can be caused by a significant loss of income, loss of employment, employment relocation over 60 miles, major medical expenses, increase in family size, overburden and just need out.
Short sale is a very desirable option for the owner who can no longer afford to make payments on the property as the Short Sale does NOT result in a deficiency judgment. In Florida, an actual foreclosure can result in a deficiency judgment against the mortgagor that can be renewed for up to 20 years! This alone makes the Short Sale a much more desirable option.
Another major consideration is the fact that a Short Sale is less damaging to your credit score as compared with a foreclosure. Simply put, your credit may be restored much more quickly in the case of a Short Sale.
Experienced and specially trained real estate brokers will work with local loss mitigation firms to structure a short sale package for presentation to the lender. The process can be complicated and should not be undertaken by inexperienced real estate agents.
Nationally and locally, the number of Short Sales increased dramatically in 2007 & 2008 and are reaching record levels in 2009.
Call or email Harris Realty & Associates to get started on your short sale process.
386.679.0117 Email palmcoastbroker@aol.com
We can also help you find a pre-foreclosure to buy... www.PalmCoastAgents.com
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