If you're no longer able to make payments on your home loan, you may be able to avoid foreclosure and reduce damage to your credit with a short sale. The objective in a short sale is to find a buyer willing and able to pay market price and negotiate with the bank to accept the proceeds as full payment on your loan... even though the proceeds of the sale may be short of what is actually owed.
Short sales are complex transactions that require special expertise to complete successfully.
Short Sales in the News
- "Short sales are being considered by all types of homeowners in all income ranges who either bought their house during the market's zenith or bought it a decade ago but in recent years pulled out equity from their homes."
Read more at "A short sale's long journey", Chicago Tribune, 10/17/2008
- "Can an owner do a short sale on a house that has a first and second mortgage?
- Vicki, Sacramento
Yes, but this is one of the things that makes short sales so difficult—they involve negotiations between multiple parties. The lender of the second mortgage often has to agree to a total loss. Mortgage insurers and home equity lenders also can get involved. Sellers have to support their claim of financial hardship with bank statements, pay stubs, and evidence they actively marketed their home, says John Anderson, a Realtor in Crystal, Minn., who has done several short sales recently."
Read more at "Is a Short Sale Right for You?", Business Week, 10/16/2008
- "Real-estate experts say many homeowners facing the possibility of foreclosure choose a short sale because it has less impact on their credit rating. A short sale would affect a person's credit rating for up to three years, while a foreclosure would loom for more than twice that long."
Read more at "Many selling at loss to avoid foreclosure", Deseret News, 10/13/2008
- "In today's housing market, short sales are becoming a more common way to purchase real estate. However, they are more complex sale transactions and need to be handled in a special way."