Short Sales Explained

A short sale can be an excellent solution for homeowners who need to sell, and who owe more on their homes than they are worth. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders have become much more negotiable when it comes to these transactions. Recent changes in corporate policy and the Obama administration have also improved the chances of getting a short sale approved.

But to be technical, here's a more official definition:

• A homeowner is 'short' when the amount owed on his/her property is higher than current market value.
• A short sale occurs when a negotiation is entered into with the homeowner's mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then 'sold short' of the total value of the mortgage.
• Some Lenders are offering "Co-operative Short Sales" or "Fast Track" Short Sales that allow you to sell short while staying current with your mortgage payment.  This option provides less of a negative impact to your Credit Report.  Bank of America, Wells Fargo, Chase and Wachovia have these programs available.

For homeowners to qualify for a short sale, they must fall into any or all of the following circumstances:

• Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
• Monthly Income Shortfall – In other words: "You have more month than money." A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
• Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.
• Underwater - You want to move or get out from under your mortgage because you owe more than the current value of your property.  A cooperative short sale may be possible.

This seems simple enough, but it is a complicated process that takes the expertise of experienced professionals. I hold both the CDPE® Designation and HAFA Certification. I am ready to identify all possible options and, when possible, assist in the quick execution of a short sale transaction.

I have a team of experts ready to help including a Real Estate Attorney, Certified Public Accountant, Finacial Planner, Credit Specialist and Short Sale Escrow Officer.  They are helping my clients everyday with a solution to their unique situation.

If you have questions or feel you may qualify for a short sale, please contact me for a free consultation.

Understanding your options now could mean all the difference in the world.