I am sure, by now, in this current real estate market, you have read or heard the term Short Sale. If not, I would like to clarify for those who consider themselves a homeowner in distress, how a short sale works and how it can benefit you. First, the definition: a short sale is the sale of a property when the market value of a home is less than the amount that is owed to the bank or mortgage company. In this market, if a property was bought when the market was at its peak, it is a common event. A quick detail of the steps that are involved:
— If the current homeowner can no longer keep up the payments and they are in a lis pendents or a few months late, a decision is made to sell the property.
–Now finding the right real estate company that has some experience in short sales, should be sought out by the homeowners. Most real estate companies, nowadays, have some experience and you should be careful to choose the “right” company which has experience in this area.
–One of the first things they will do is call your bank/mortgage company for a “short sale package” which will be sent to you. They should work with you to ensure that the paperwork is properly filled out; such as the hardship letter, present income and list of creditors and why the homeowner has lost the ability to keep current with the mortgage payments. Once that is completed or almost completed, they should list the property at the current market value. The property is now able to be listed at a competitive price.
–Now the hard part. Once the listing finds a qualified buyer, there is more to be done. The bank will send an appraiser, and if the paperwork is in order the bank should accept the offer.
–Fully executed contracts are sent to the bank. Any commissions are paid by them.
–Once it is approved and the closing takes place, the homeowners debt should be fully paid and a pending foreclosure will be avoided.
It is important in dealing with short sales, you choose a real estate company that is familiar with this process.