Deciding between a short sale or a foreclosure may sound like choosing of the lesser of two evils, but a short sale is a thousand times better for a distressed homeowner.
Foreclosures and short sales take up nearly 40 percent of recent home sales. Nearly 12 million homeowners are upside down with their mortgages and the number is growing, according to RealtyTrac. It is also estimated that number of homeowners will increase to 15 million within a year's time.
Successful short sales have the least amount of consequences for the homeowner. In short sales, debts are forgiven and are non-taxable. Short sales do not challenge most security clearances or employment. In some successful short sales, it is possible to convince lenders to give up the right to pursuit deficiency judgment against the homeowner. Also, if a short sale is managed properly, the home will be sold at a price close to market value, which is better than an REO sale that results in a lower deficiency.
Although the short sale process is the best way to go, it is not easy or financially pain-free. If you're considering a short sale, here are some tips that you should consider.
Get expert help.
Gina McKinley was trained by the nationally acclaimed Distressed Property Institute in Florida. She learned how to successfully manage short sales and assist homeowners in financial distress, something that many Realtors do not want to do because of the extra time and work involved.
"The CDPE course prepared me to better help homeowners in need of options to save them from foreclosure," said Gina McKinley. "It is so gratifying to be able to help people who are suffering due to circumstances beyond their control. In this economy, it's more important than ever that Realtors work to help clients in bad situations."
Start the process as soon as possible.
Contrary to what some homeowners believe, you do not have to be delinquent to start or complete a short sale. Do not sign the title of your property over to anybody.
Submit a hardship letter.
Even though the services of expert agents and short sale specialists are necessary to completing a successful short sale, the homeowner still needs to do their part to help convince the lender that the short sale is the best outcome. The hardship letter should explain why it is impossible for the homeowner to pay the full amount of the loan. The homeowner will need to provide accurate detailed financial information and indicate whether the hardship is temporary or permanent.
Price the short sale competitively.
The property will need to be priced competitively and near market value. The banks will conduct an appraisal and if the contract price is significantly lower that the appraisal, chances are that the bank will not accept the offer. Many seller's think that they have to list the property at what the debt is but that is not usually successful. Being priced competitively will attract buyers and the good news is that banks are more willing to negotiate.
The short sale can be a lengthy process, have, patience, quality experts on your side, and stay on top of what is needed from you to help close the deal.
Comments(0)