If you’ve been paying attention to real estate news you’ve surely heard the term “Short Sale.” You are not alone if you are confused about what one is. Everyone uses the term, but many people don’t have the slightest clue what a short sale is.
A Short Sale is NOT a foreclosure.
A Short Sale is NOT an REO.
A Short Sale is an alternative to a foreclosure or REO.
A Short Sale is a process that owners and lenders can use to avoid foreclosure. Short selling your home is a complicated process and cannot be done alone. Contact us to work with an experienced broker to short sale your home if you are at risk of default.
Here is a basic overview of the short sale process:
When a homeowner is in default (behind on their mortgage payments), either the lender or the owner can contact the other and try to initiate a short sale. It is important to understand that the lender, or in some cases multiple lenders, must agree to a short sale. Once the lender agrees, the property is listed for sale.
The lender will typically require that they use one of their approved listing brokers to sell the property. The lender must approve every aspect of the sale as they need to understand how much they will get out of the property once it’s sold. The lender often times has to coordinate with junior lenders and investors to get the sale approved because they stand to lose $50,000 – $100,000 or more on the sale.
There are benefits to both the lender and the borrower for a short sale. The borrower avoids foreclosure, which will destroy their credit for many years, and the lender does not have to step into the chain of title (which adds significant liability) nor do they have to incur foreclosure or eviction costs.
How do I short sale my home?
Contact us at 1-800-287-1808 today to get some help on short selling your home or if you have any other questions.
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