Short Sale? Let's get the facts straight!
A quick and dirty definition of a short sale is when a seller sells their home for less than what they owe on the mortgage. The bank must approve the sale, and who pays the deficiency is up for negotiation.
Why would a homeowner do this?
There are a number of reasons homeowners are forced into financial hardship, many of which have nothing to do with how they manage their finances. It could be anything from illness, relocation because of work, loss of employment, divorce, and so on. It is estimated that most American families can only maintain their current living expenses for 30 days or less when income is interrupted for any reason.
Why not let it go into foreclosure?
While negative credit items fall off of an individual's credit report after seven years, the one question that is asked on every mortgage application is "Have you ever had a foreclosure?" This item has staying power and will follow a person around indefinitely. There are tax consequences to consider for either side of the argument. The homeowner should consult a tax professional to discuss the best course of action. However, there are laws in place to protect distressed homeowners. Credit scores will drop- typically anywhere from 100-250 points, but usually can be repaired within 18 months. Short sales are typically the lesser of the two evils and the damage caused can usually be repaired.
What a short sale is NOT:
It is not a "Get out of my mortgage free card." A homeowner has to be approved by the lender and truly have a hardship, or have an impending hardship and on the way to foreclosure. Just because a homeowner is upside down on their mortgage, does not mean that they qualify for a short sale.
How does a distressed homeowner get started?
First the homeowner should call me! As a Certified Distressed Property Expert and an accredited Short Sales and Foreclosure Resource, I would love to discuss your options with you. It never hurts to ask!!
"I'm never too busy for any of your referrals!"
