Is a short sale right for you?
A short sale offers property owners who owe more on their property than it is worth an attractive alternative to going through foreclosure. If a property owner is unable to pay the mortgage on their property and placing the property on the market as a regular listing is not a viable option because the property is unlikely to sell for more than the outstanding amount of the loan, the owner may want to consider retaining an agent to negotiate a short sale. In a short sale, the owner retains a real estate professional to negotiate with the owner's lenders to accept a pay-off that is less than the owner currently owes. In a short sale, the owner is not responsible for paying the difference between the negotiated pay-off amount and the outstanding loan amount.
What Information Must the Owner Provide to Initiate a Short Sale?
In order for us to negotiate a real estate short sale, we first must list your home for sale. During the listing period, you will need to provide the following documents to us so that we may prepare a real estate short sale request to send to your existing mortgage lenders.
Documents required for Real Estate Short Sale
Please gather the following:
With these documents we create a package to demonstrate to the lenders why you require a real estate short sale and submit this to the appropriate department at your lender, once we have an accepted purchase offer for your home.
Who can Qualify for a Real Estate Short Sale?
Typically, the mortgage lenders will only accept a real estate short sale if you are at least one month behind on your mortgage payments, have a ready and willing buyer and you are unable to debt service all of your existing liabilities. If your financial situation has changed and you are currently making less money than before and you have no more savings, you most likely qualify for a real estate short sale. Providing us with the required documentation as listed above will enable us to provide evidence to support your request for a short sale.
What are the Benefits of Negotiating a Short Sale rather than allowing the Lender to Foreclose on Your Property?
Negotiating a short sale rather than going through a foreclosure is preferable for owners who want to get out of a difficult situation while minimizing the damage to their credit scores and maximizing their potential to become homeowners again in the future.
The effects of a typical foreclosure can be seen in the former owner's credit score for approximately 5-7 years. Further, the credit report of the former owner will state that the former owner has gone through a foreclosure. If a short sale is successfully negotiated, the short sale will appear on the former owner's credit report as an agreed pay-off rather than a foreclosure, which is far less damaging and typically allows the former owner to regain their former credit score within 2-3 years.
Traditionally, following a foreclosure procedure, the former owner of the property more than likely will not be able to obtain a loan to purchase real estate for 5-7 years. Following a short sale, the former owner is typically eligible to purchase real property after only 2-3 years of the short sale.
How Can you Learn More about Short Sales or initiate a Short sale?
If you owe more than your home is worth and you need to sell your home, please contact us at (310) 733-9222 or Candace@ThirdPointProperties.com and we will be happy to assist you in evaluating whether a short sale is in your best interest.