Why Short Sale? – FREE information on Foreclosure Defense, Mortgage Modification, Tax Consequences, Deed-in-lieu-of-foreclosure, Short Sales, Deficiency Judgments, Bankruptcy Referrals & more. John Michailidis, SaraMana Properties – Phone: (941) 822-5221
How Do I Short Sale My Sarasota, Bradenton, Venice Florida House? Your Questions Answered Here!
This is becoming an ever more common question being asked by Sarasota and Manatee County Florida property owners.
So many are turning to Short Sales, because of the many advantages they offer vs. Foreclosure. In simplest terms, a Short Sale is nothing more than selling a mortgaged property for less than the loan payoff balance - the property is sold for an amount that comes up "short" of fully paying off the loan.
Example: You bought your house at the height of the boom. The current mortgage balance is about $250,000 and today's market value is about $150,000. Since nobody is going to buy a property for more than the current market value, whether the bank takes the property back in foreclosure and then resells it, or if they accept a Short Sale offer, the most the property is going to sell for is $150,000.
Since the bank is going to have to turn around and sell the property anyway if they get it back, they approve a short sale offer for $148,000, thereby Stopping the Foreclosure, and saving you from the credit damage and likely Deficiency Judgment that Foreclosure brings.
Why Do Lenders Agree To Short Sales?
Without going into a long and technical explanation, the bottom-line for why banks agree to Short Sales is that it is often more cost effective for them to do so. After all, banks are businesses, so when weighing the costs and benefits of a Short Sale vs. the costs and benefits of a Foreclosure, if it's in their best interest to take a Short Sale they will. Fortunately for homeowners, given the long and expensive foreclosure process banks face, it is often to their advantage to accept a Short Sale.
If Your Bank Accepts a Short Sale Offer You Win!
You come out ahead of the game in so many ways when we get your lender to accept a Short Sale offer:
- Much less of a negative effect on your credit rating, which helps you with such things as future housing, future employment, lower insurance premiums, etc.
- You are much more likely to have the bank waive a Deficiency Judgment (the difference between what you owe and the net amount the bank receives from the Short Sale) with a Short Sale - it is almost unheard of for a bank to waive a deficiency after a Foreclosure, but quite common in a Short Sale.
- Even if there is a Deficiency Judgment after a Short Sale, the amount will be much less than after a Foreclosure, because you will not have to pay all of the court costs, fees, and additional accrued interest associated with a Foreclosure.
- You avoid the social stigma of having a Foreclosure permanently recorded against your name in the County Records.
Realities Of The Short Sale Process
While completing a Short Sale can be the ideal situation for you as a homeowner facing foreclosure, it's a fact that not all Short Sales close. Short Sales are among the most difficult and complex of all residential real estate transactions to complete successfully.
The reasons for this are many, but include: Excessive amounts of paperwork, Long time-lines (5-7 months on average), Typically incompetent bank Short Sale departments, and the list goes on . . .
The vast majority of property owners simply aren't set up to deal with the process, let alone having the patience to follow-up on a weekly basis for months at a time. The unfortunate truth is that most seller initiated Short Sale attempts fail, as do Short Sale attempts by inexperienced real estate agents that don't quite know what they are doing.
Happily, an experienced, professional Short Sale Team typically closes in excess of 90% of the Short Sale transactions they begin, and their entire fee is paid by the lender at closing, with no out-of-pocket costs to the homeowner.
It's a true "win-win" for anyone contemplating a Short Sale.
The SaraMana preForeclosure & Short Sale Assistance Team helps Sarasota and Manatee County Florida homeowners facing Foreclosure to STOP Foreclosure, Avoid Deficiency Judgment, and move on with their lives without the stigma and long-term overhanging debt that a Foreclosure could bring.
For more information Call us at 941-822-5221, or submit this ONLINE FORM.
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