INFORMATION YOU CAN USE....SHORT SALES.

                                                   WHAT ARE THEY AND WHO CAN GET ONE?

If you've listened to the media, you've most likely heard the term Foreclosure or Bank Owned, however some are just learning about the term Short Sale. In an attempt to help sellers and buyers I would like to explain what a short sale is, what makes them  so complicated and why you need professionals to help you.

What is a short sale? A short sale is when the homeowner owes more to the lender than the market value of the property. For an example: You have a loan on your house for $425,000 but in today's market a buyer will only pay $350,000 based on the last properties that sold in your neighborhood. Add to that the costs to sell and well, your home is what we call Under Water.  The seller would need to market the home well over market value to pay off  the bank, and all costs associated with selling a home. On the flip side, if you are a buyer, you would never consider paying over appraised value in a depreciating market. So you will have to ask the  lender if they will take less for the home than is owed. If the lender says yes, than that is called  a short sale.

Just as there are many different lenders there are many different policies governing the short sale procedures. The lenders all have their own criteria of what short sales they will accept. Just because your house falls in this category does not mean that every house will be approved for a short sale. 

First Question To Ask. Is there only one trust on the home? If so, these Short Sales can go fairly quick. If you have two loans with the same lender, consider this your lucky day and call me. However, if the home has two or even three trusts that need to be satisfied at settlement with different lenders things get far more complicated. 

If you have a first mortgage and a second mortgage with different lenders that will certainly complicate matters more and it muddies the water a bit for getting the short sale approved since the second (and third) note holder will want something to accept the short sale. Typically the first note holder offers a mere token to the remaining  note holder however you will need the approval of all the  lenders in order to close and pass a clean title to a buyer. 

Sound Confusing....it is. Take two aspirn and call us for help. 703-851-3085

Can anyone do a short sale? The answer to that questions is a resounding NO. Short sales are for those that do not have liquid assets to cover the difference between the final sales price and the mortgage amount. Keep in mind there will be Real Estate Commissions tacked on, later mortgage payments and interest, pre-payment penalties (if they apply), attorney fee's, closing fee's and buyer incentive fee's.The general rule of thumb is if you have assets in the bank, an inheritance sitting somewhere or the ability to pay in a reasonable time, you will not be granted a short sale.

A Short Sale Is A Hardship Case-a seller must submit financial statements, bank statements, pay stubs, tax records and a strong hardship letter to the lender to be considered. It's almost harder to get a short sale approved than it was to buy in the first place. Sellers you made a promise to pay, and they are going to hold your feet to the fire, that is unless there is no viable way you can afford the home.

Reasons Short Sales Are Granted:

• Catastrophic Loss In Income ( Job Loss, Flooding, Natural Disaster, Death of Provider)
• Terms Of Original Loan have surpassed your ability to pay
• You've must sell, the home will not sell for current loan balance and the bank may foreclose.

So What Do You Do. - You are a homeowner who has to sell. You want the most you can get for the house, however the real estate values have depreciated and your home isn't worth what you owe. Or you are a buyer who has fallen in love with a home that is being offered as a Short Sale. The best advice I can give you is get help. Not just anyone it has to be a Realtor who has handled short sales before and successfully. They take time, patience and a great deal of organization from start to finish. Don't become frustrated. Get Help...

What To Do First If You Are An Owner Who Is Considering Selling By Short Sale.

1. Gather all your paperwork together
2. Get a true handle on what you owe and to whom                                   
3. Check about pre-payment penalties
4. Call Your Mortgage Company and alert them you are falling behind
5. Next Call a Realtor to assist you.
6. We have systems ready and get the ball rolling fast.
7. The goal here is to avoid foreclosure at all costs
8. As your Realtor I will deal directly with your lender/lenders.
9. Time is off the essence....call me today if you are falling behind.

What Do You Do If You Are The Buyer Who Wants To Make An Offer On  A Short Sale Home.

1. Get pre-approved
2. Work with a Realtor to get the real statistic's and comparables
3. Be the first to make an offer and chances are if you are patient and flexible you will get the house
4. Be realistic about your offer,many banks will do a full appraisal to determine value
5. Put your best offer on paper...remember if you like it, someone else will as well
6. Remember the seller can and will take back up offers.
7. Weeks can go by, and in the end the lender who is approving the short sale may request to revise the terms set forth in the ratified contract.
8. That is the most frustrating part about short sales. 
9. Know that not all sellers are approved for short sales ( there is risk.)
10. It is critical that you work with Realtors are experienced in this process.
11. Let us coach you on all of your options when considering a Short Sale Purchase.

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Got A Question? Just post a comment below and I will be back with you shortly.

Or call me directly at 703-851-3085.

Contact Peggy James or Erick Blackwelder of Erick and Company/Exit 1st Choice Realty, Woodbridge VA. Realtors®, call 703-851-3085 (Peggy) or 703-590-2252 (Office) to list your property for sale or to purchase a property in Lake Ridge, Westridge, Old Bridge Estates, River Falls, Middle County, Manassas, Montclair, Dumfries, Occoquan, Dale City, Gainesville area's.

Or simply use our contact form  

http://ericksellshomes.com/whats-my-home-worth.asp