What Is A Short Sale?

When a home is worth less than its mortgage it is known as an upside down mortgage. A lender sometimes agrees to absorb the difference between what is offered for a sale and what is owned to the lender ...     it's called a short sale.  

A last chance before a foreclosure, short selling your home won't make you any money but when your debt is more than you can handle, negotiating a short-sale may rescue your credit rating and let you avoid the embarrassment of foreclosing. 

Generally in order to qualify for a short sale:

1. Your loan must be in default -- generally the lender looks that it is at least two months behind.

2. Your house must be worth around 63 percent of what you owe and sell for at least 82 percent of the "as-is" appraised value - but each lender is a little different and the amounts can vary.

3. The lender generally okay's a sale within a certain time frame.

4. You must convince your lender to assume the cost of the short sale:

THE COST OF SELLING = Real estate commissions + Taxes + Closing costs + Title fees + Liens of record + Balance of all loans on the home including interest and late fees, etc.

THE COST OF THE SHORT SALE = Cost of selling - Appraised value

Once all the figures are given to the bank, the lender can take up to 45 days to balance the cost of the short sale against the cost of a foreclosure. Not every lender will agree to a short sale though, which is why hiring a a Realtor with Realty Exchange may be the best way to negotiate this kind of deal. Contact us - we are experienced in negotiating this type of arrangement and may have more leverage with lenders and be able to guide you through the process. We can certainly help you find a buyer and get the process started for you!

Give us a call for more information at 386-446-7717