What is a Short Sale?
A short sale can be an excellent solution for Bay Park homeowners who need to sell, and who owe more on their homes than they are worth. Banks and lenders have become more negotiable when it comes to these transactions and have ramped up departments and processes to expedite short sale approvals. Investment properties can qualify. Recent changes in corporate policy and the Obama administration have improved the chances of receiving approval.
Understanding the terminology:
- -A homeowner is ‘short’ when the amount owed on his/her property is higher than current market value.
- -A ‘short sale’ occurs when a negotiation is entered into with the homeowner’s mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then ‘sold short’ of the total value of the mortgage.
For homeowners to qualify, the following circumstances generally apply:
- -Financial Hardship – There is a situation causing you to have trouble affording your mortgage. A future rate adjustment which will increase your payment to one you cannot afford will usually qualify.
- -Monthly Income Shortfall – In other words: “You have more monthly expenses than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
- -Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage. Most will not ask you to use a retirement account.
This seems simple enough, but it is a complicated process that takes the expertise of experienced professionals. To learn more about this and other foreclosure alternatives, call Kyley Christy today at 619-885-3941. She completed extensive training to earn the designation of Certified Distressed Property Expert (CDPE) and has successfully completed many complex short sale negotiations with as many as six liens on a home. There is no cost or obligation and if you do short sale your home, the lender almost always pays all fees including real estate commissions.