Short Sale Info

What is a Short Sale?

In the past, it was rare for a bank or lender to accept a short sale. Today’s market has changed everything. Now banks and lenders have become much more negotiable when it comes to these transactions. So a short sale can be an excellent solution for home owners who need to sell and who owe more on their homes then they are worth.

How the name evolved and what it means

• The home owner is ‘short’ when the amount owed on the house is higher than the house’s current market value
• A short sale occurs when the negotiation process begins with the home owner’s mortgage company to accept less than the full balance of the loan at closing
• The buyer closes on the property, and then the property is ‘sold short’ of the total value of the mortgage

For homeowners to qualify for a short sale, they must have a financial hardship. Hardship can simply be defined as a material change in the financial stability of the homeowner between the date of home purchase and the date of the short sale negotiation. Acceptable hardships include, but are not limited to, mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.

Homeowners must fall into any or all of the following circumstances:

• Financial Hardship – there is a situation causing you to have trouble affording your mortgage

• Monthly Income Shortfall – you have more ‘month 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

 Should you qualify for a short sale, the biggest advantage is that you may qualify for another mortgage in as little as 24 months (as opposed to five years for a foreclosure).

It can be a complicated and confusing process.

If you have questions or feel you may qualify for a short sale, please contact me – (704) 502-7744.

Holly Pasut
Broker, North Carolina and South Carolina, Graduate Realtor Institute (GRI), Certified Distress Property Expert (CDPE), Certified Luxury Home Marketing Specialist (CLHMS), Certified Negotiation Expert (CNE)

Holly@TeamHolly-would.com
Hines & Associates Realty
                                                                        Content courtesy CDPE.com