What is a short sale?

A short sale, also known as a pre-foreclosure sale, allows you to sell your home for less than the balance remaining on your mortgage. Your mortgage company must agree to the sale, since it will take a loss.

Most lenders have programs and guidelines for short sales, which your real estate agent can help you with. You may also be eligible for the government’s Home Affordable Foreclosure Alternatives Program (HAFA), which offers standardized short sale critieria with government incentives.

A short sale may be an option if:

• You are behind on your mortgage payments
• You are facing a long-term hardship
• You are ineligible to refinance or modify your mortgage
• You owe more on your home than it’s worth
• You have not been able to sell your home at a price that covers your mortgage balance
• You can no longer afford your home and are ready or need to leave

Benefits:

• Eliminate or reduce your mortgage debt
• Avoid the negative impact of a foreclosure
• Repair your credit sooner than after foreclosure
• Purchase a home sooner than after foreclosure (two years in some cases--as opposed to seven)

How does a short sale work?

The process is similar to a normal sale in many ways. You will work with a real estate agent to market your home and negotiate a contract. However, your mortgage company will be involved, especially in the contract phase. In cooperation with the mortgage company, your agent will:

• Collect your financial information
• Contact the mortgage company
• Set the sale price (based on current market value)
• Market the property
• Negotiate with other lien holders (second mortgages, home equity credit lines, etc.)
• Review offers
• Negotiate terms of sale
• Work with buyer’s agent and lender to complete transaction

In some cases, sellers are eligible for relocation assistance after completing a short sale.

A short sale may take 120 days or longer, depending on a variety of factors. Recently the huge volume of short sale files has created a backlog with most major lenders, so you will need patience.

If a short sale doesn't work, you may be able to simply transfer ownership of your property to your mortgage holder in a process called deed in lieu of foreclosure.

Next steps:

1. Contact your Certified Real Estate Broker. David Ramirez
2. Short sales are complicated and difficult. You'll need the help of a qualified professional—not just any real estate agent, but one with experience in short sales. A certified short sale agent can determine quickly whether a short sale is viable for you. 
3. Gather your financial documents. You'll need information on all mortgages and personal debts, as well as household income and expenses.
4. Contact your mortgage company. Tell them you're interested in pursuing a short sale and want to see if you qualify. Be prepared to explain your hardship.

Your mortgage company wants to help you avoid foreclosure, and will probably work with you. The biggest mistake you can make is to wait. Contact, David Ramirez today to determine if you are eligible for a short sale.  831-444-8430