What You Need To Know About the Short Sale Process
A Short Sale is basically a process in real estate wherein a property is up for sale for less than the actual mortgage balance. This kind of real estate sale can be a better option than foreclosure since it is a more dignified way to solve the problem.
A short sale process can happen once a homeowner cannot settle payments with the mortgage company and is also not capable of selling the house because the mortgage payments on default is more than the current market value of the property. The home will be sold for less than its present market value. The financial liability is normally forgiven by the mortgage company. The process saves both parties from the consequences of foreclosures, since the borrower will be compensated and forgiven for debts. The mortgage company, on the other hand, will get more money from the purchase of the home compared to a foreclosure.
The first thing you need to do in a short sale process is to get in touch with the lender, usually the bank who has approved your home loan, to inquire about the option of a short sale and evaluate if the lender is willing to enter such process. Banks don’t normally prefer short sale process, but there is no harm in trying to discuss the options that could be mutually beneficial.
It is also a great move to hire professional services to help you in the short sale process. Normally, you can consult with Real Estate Agents or property lawyers who have experience in managing negotiations for short sales. These professionals can provide you with fair and accurate assessment of your home based on the current market value. Basically, market value is determined by checking the value of other homes of the same size and age that have been previously sold in the area. A professional can help you with this comparative analysis. Real estate agents can help you put the property up for sale. At this point, you need to provide an authorization to reveal personal details about your home and the loan information to the agent and the prospective buyer before starting the short sale process.
Once you receive a sales offer from a prospective buyer, refer it to the lender. Accepting the offer doesn’t automatically mean that the lender will also accept it. To hasten the short sale process, provide the lender with a proposal along with other important documents necessary. Most lenders require that you write a letter explaining your financial struggles. Banks will not approve short sale processes until they validate the situation by checking your bank statement and other financial documents.
After assessing the present condition of the home alongside its present market value, the lender usually consults the realtor to acquire more information on the price. During the short sale process, the purchase contract will also be checked to determine whether all figures including commissions are acceptable. All you need to do now is to wait for the lender’s response about the purchase offer. Be patient, since this will usually take time about six months to a year.