What is a short sale???

What’s a Short Sale
Judy Chapman (Koenig & Strey Real Living)
Try Googling What is a Short Sale, and you’ll get over 6 millions links to informative web sites.

So it’s no wonder many home owners are confused about Short Sales, what they are and what they have to offer. With so much information and misinformation floating around, it’s easy not to know which end is up.

From all the hoopla, you probably surmise a Short Sale is some thing good and also some thing complicated. To separate the wheat from the shaft, you want the simplest explanation possible. An explanation that will help you decide if a Short Sale is right for you.

Here’s the simple answer to the question, What is a short sale?

If you’re upside-down on your mort gage — meaning your house is worth less than your loan — you can still sell your house … as a Short Sale.
Here’s the long-winded definition:

A Short Sale occurs when, upon the sale of the property, the lender agrees to accept a pay off for less than the remain ing mort gage balance. The lender can for give the entire short fall as well as pay the seller’s closing costs, includ ing the real estate broker’s sales commission.
The loss can —.

Be completely writ en off by the lender
Partially or wholly paid off over time by the borrower through a promissory note  – or –
Partially mitigat ed through a lump-sum payment at the time of closing.
The lender may also seek the deficiency from the borrower post-sale.

The long and the short
For home own ers who can’t afford to live in their houses any longer — but can’t sell because they’re upside-down on their mortgage — a Short Sale could very well be the answer to a good night’s sleep. In fact, it may be the only viable way out of an impossible situation, stuck as they are between a rock and a hard place.

Doing a Short Sale is noth ing more than putting your house up for sale in the usual man ner, negotiating a solid contract with a qualified home buyer, preparing extra paper­work, waiting a bit longer for your bank to approve the Short Sale, and moving on with your life.

It doesn’t really matter the state of your financial situation. If you need to get out from under an upside-down property, the chances are high you can do it with a Short Sale.

Being upside-down isn’t the same as being inside-out
Cur rent ly, 25% of home own ers are upside-down on their loans.

Many of these homeowners have or will soon face adjustable interest rates that make it impossible to keep up with payments.
Others are experiencing hard ships, like job loss or illness.
Some have to make a change due to job relocation or family reasons.
Still others are in a negative cash flow position on rental properties.
And others don’t see the point of making payments on a house that will never recover from the real estate bust.
Unless banks forgive a portion of those loans, however, home owners are ‘under house arrest’ and can not sell.

This is where home buyers look ing for a good deal come into the pic ture.

Because buy ers must wait for bank approval, they’re only willing to purchase a Short Sale pro vid ed it’s at a dis count ed price. Depend ing on the condition of the house, Short Sale prop er ties generally sell for about 10% less than com parable ‘non-distressed’ hous es.

This kind of dis count makes your house that much more attrac tive to many home buy ers, who are usually investors and first-time home buyers. Some buyers who currently own a home but want to move up or down size are also will ing to make the plunge, provided the right opportunity comes along.

You don’t have to get dizzy from being upside-down
Because your lender must take a loss on its original invest ment, it must decide whether approving your Short Sale is a sound finacial decision. They do this by first exam in ing your financial position and then making sure the con tract ed price is the best possible price given current market conditions.

Getting right-side up
When you decide to do a Short Sale, make sure to take 2 crucial steps.

Treat the selling of your house with the same dedication and respect as you would a regular sale.
Under stand that a Short Sale isn’t guaranteed and requires flexibility, patience, and the willing ness to make it work.
Take it to the bank
Done right, a Short Sale can be successful. The emotional cost of doing one will be more than off set by being able to move out and move on.

     

CHICAGO SHORT SALESFIND SHORT SALE REALTOR(R)FIND ORLANDO RE