Short Sale your Property
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Short Sale
For some clients, selling their home is actually the relief that they need. After reviewing your financial portfolio, it may become obvious that you can no longer afford your home. Many owners have often realized this and tried unsuccessfully for months to sell their home through traditional real estate methods.
But, because of market fluctuations and changes beyond your control, sometimes your home may not sell at the anticipated full price of your loan. A Short Sale allows you to sell your home to a third party at a price which is less than the total amount that you owe.
What is a Short Sale?
A short sale is when a lender accepts a discount on a mortgage to avoid a possible foreclosure auction or bankruptcy. Instead of buying from a seller, you are purchasing the property directly from the lender for a discount. For example: A homeowner, who is facing foreclosure, has an existing first mortgage of $300,000. You write an offer to the lender for $220,000, which is accepted as full payment for the loan. This is a short sale. Why are they willing to take such a discount? Several reasons. First of all, banks do not like excess inventory and bad loans on their books; therefore, if they see an opportunity where they can sell the property without a huge loss, they will do it. Secondly, lenders know they could lose a lot more money if the property goes to auction. There are so many fees involved if the property goes to auction, that they would be better off taking the discount beforehand and be finished with the headache of it all.
Your lender will use the proceeds from the sale to pay off the mortgage and the remaining balance will be negotiated or perhaps even forgiven. This avenue is open for homeowners who are willing to part with their property but keep their credit rating with the least amount of negative reports.
Negotiating a Short Sale with the lender is a difficult process, generally because it is very hard to find the bank officer who has the authority to accept a discount. Much like getting your phone bill corrected, you can expect the process to involve a lot of waiting on hold and being bounced around an intricate maze of automated voice mail systems. Once you get in touch with the right person, then the hard work and the negotiating can begin.
The Mortgage Company may require a written contract with you and the buyer, a HUD-1 or settlement statement of the sale, a buyer assurance letter stating the potential buyer is approved for the new loan, proof that the house has been on the market for 90 days with a Real Estate Agent and financial information from you showing that you can’t afford the house.
Many short sales fall through for a number of reasons. We have successfully negotiated a Short Sale for many home owners and we know what the Mortgage Company needs for approval and in what order.
Here are some examples of Short Sale agreements from our actual client cases. These are clients contacted us for help regarding a Short Sale. We negotiated the Short Sale on their behalf to allow them to sell the house for a discount and walk away from the home. These are only recent documents and are just a sampling of the approved Short Sales we have gotten approved for our clients. These documents are on the mortgage company letterhead for authentication.
Countrywide Short Sale Agreement - click to download or print
HSBC Short Sale Agreement - click to download or print
If you are willing to sell your home or currently have your house on the market, some lenders might agree to put your foreclosure on hold while you attempt to sell your home through traditional real estate methods. You may be able to qualify if your mortgage is at least 2 months delinquent, you are able to sell your home within 3-5 months and your new appraisal shows that the value of your home meets HUD program guidelines. You will be able to pay off your mortgage loan to avoid foreclosure and prevent any damage to your credit rating.
You need help with a Short Sale? Fill Our Our Free Questionnaire