Short Sale…Is it an Option for You?
A Short Sale is a process by which the Homeowner’s Lender will accept a payoff that is LESS THAN what the Homeowner actually owes on the mortgage. Say the Homeowner gets transferred, divorced, loses their job, etc… and needs to sell their home. Problem is that they paid $450,000.00 for a house that’s only worth $299,000.00 in today’s market. This is where a Short Sale becomes an option for the Homeowner.
If you find yourself in a Short Sale situation it would be wise to contact a Realtor who has been educated on handling Short Sales. Once you or your Realtor has talked with the Lender and believe that you have enough time, you should list the property for sale. Once a contract is received, the Homeowner will sign the contract but the sale will be contingent upon a third party approval (Your Lender agreeing to the Short Sale). Patience is absolutely necessary. Some Lenders respond in 24-48 hours while others can take weeks. If an agreement is reached, the transaction continues similar to a typical settlement. A short sale could result in serious tax consequences and will affect your credit. Contact your tax advisor or Realtor for more information.
Short Sales are not always nightmares. Remember, you’re asking the Lender to dismiss a large amount of money that you promised to pay to them. It is important to have a clear understanding of the Short Sale process in order for it to go as smoothly as possible.
