Short Sales-What is a Short Sale?-A short sale can be a good solution for homeowners who need to sell, but owe more on their mortgage than the home is worth. In the past, it was rare for a bank or lender to accept a short sale. Now, however, due to overwhelming changes in the market, banks and lenders have become much more flexible when it comes to approving short sales.
Recent changes in many corporate policies and the Obama administration have also greatly improved the chances of getting many short sales approved.
To be clear, here is a more technical definition of a short sale: When a seller must sell their home for less than they owe on the property, and the lender that they owe the money to agrees to take less than they originally loaned to the seller, that is a short sale. The "short" of the sale is the difference between what the property can be sold for now minus the loan balance.
Example: Home owner owes $400K on loan for their home, but the home is only worth $300K. The "short" of the sale would be $100K Plus Expenses that the Lender would have to take a loss on.
What qualifies a seller for a short sale?
Here are just a few examples of Hardships that may qualify a seller for a short sale.
- Loss of Job
- Becoming disabled
- Divorce
- Death of a spouse
If you are considering a Home Short Sale you will need a team of highly specialized professionals to help you understand your options and home foreclosure alternatives.
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