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I know that most homebuyers shy away when they hear the term 'short sale' yet short sales can offer an attractive opportunity for those individuals that can be patience, as these homes usually sell at a market discount.
What is a short sale?
A short sale is when a lender agrees to less than what is owed on the property, and forgives all or a portion of the excess debt. For a short sale to close all parties who are owed money must agree to take a reduced amount — or possibly no money at all — which can make this transaction a complex and time consuming one.
Who is a short sale good for?
A homeowner who owes more than the value of their home.
A homeowner who has experienced or is experiencing a financial hardship.
A homeowner who is no longer able to afford their mortgage.
A homeowner who have been denied for a loan modification.
What are the benefits of a short sale vs. foreclosure?
Some lenders provide financial incentives of up to $3,500 for moving costs.
Short sales don't have the same level of negative impact on your credit score.
You can buy another home within 1 – 3 years depending on your other credit history.
If you are considering a short sale home, you will need to patient as it often takes much longer than a traditional sale because of the documentation required and the sign–off that is required by the lender. The short sale process needs the lenders approval of the sale and its willingness to take a loss.
When homes do list as short sales, they are much more likely to be maintained by the sellers because they still want to get as much money as they can. A seller probably won't make any big home improvements so you will need to be prepared to make some repairs and improvements.
We've helped more than 100 clients navigate the short sale process in the past several years. If you're considering a short sale, please give us a call to schedule an appointment with our legal team.