Short Sales
During the past 3 years, home prices in the Valley have declined, as they have nationwide. Some residents find themselves in the uncomfortable position of owing more for their home than it is currently worth.
Combine that with another life-altering event, such as a job loss, divorce, or mandatory relocation, and it can be devastating. There are numerous options for making a change to your current housing situation, including loan modification, short sale of your home, foreclosure or deed in lieu of foreclosure. Only you can determine what the best course is for you.
What is a Short Sale? If you owe more for your home than it is worth on the open market, AND you have suffered a hardship, your lender may consider accepting less than the amount of your loan if you sell the home. The key is that you must be able to prove a hardship, and must be willing to provide documentation that shows the hardship. Your lender will consider numerous situations as a hardship, including job loss, divorce, major medical expenses, forced job relocation, military service deployment, and loss of a contributing family member.
What is the Process? If you believe you have a hardship that qualifies you for a Short Sale, the first step is to speak with a real estate agent with experience in handling Short Sales. Experience is key in handling successful Short Sales - every bank handles the process differently, and understanding the process and what a bank will consider important is vitally important in reducing the time it takes to get acceptance from your lender, and may mean the difference between success and failure. I have specialized in Short Sales for the past 18 months, have worked with most of the major banks, and have closed many Short Sale transactions that allowed families to move on with their lives.
Once you and your Realtor have determined that you have a hardship that qualifies you for a Short Sale, the next step is to get your home listed for sale, and start gathering your paperwork. Keep in mind that you will not be allowed to receive any funds when the property closes escrow, so it is not a good idea to overprice the home. Your Realtor should provide you with a Competitive Market Analysis and help you price the home to attract potential buyers.
When you receive an offer, you will be asked to accept the offer, and your Realtor will forward it to the appropriate department at your lender's, together with all the required paperwork. You Realtor will then be in constant contact with the bank to insure that they are moving forward to process the contract.
If the bank accepts the offer, you will be asked to sign their Final Acceptance Letter, the buyer will open escrow at a title company, and closing will generally occur within 30-45 days. You will need to make arrangements to move no later than the closing date.
What is the impact of a Short Sale? A Short Sale will have financial consequences for you - typically it will impact your credit score, and in some cases the bank may attempt to collect the difference between the sale price and what you actually owed. It is strongly recommended that you hire an experienced Short Sale Realtor ( who may be able to help mitigate the impact) and speak with a CPA, tax attorney or other qualified professional to assess the consequences to you. Generally speaking, however, a Short Sale is less damaging to your credit, and for a shorter period, than a foreclosure or deed in lieu of foreclosure.
Please keep in mind that, while you will receive no funds from the sale of your homes, you will also not have to pay any of the closing costs associated with the sale. Most people who sell their homes through the Short Sale process do not have any out-of-pocket expenses.
What is the next step? If you believe you may qualify for a Short Sale, please give me a call - I am happy to provide you with more detailed information, give you a Competitive Market Analysis, and confidentially review your situation.
