A short sale can be an excellent solution for homeowners who must sell, but owe more then what their home is currently worth. In the past, this was rare for a banks and lenders to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders have become much more negotiable. Recent changes in their corporate policy and goverment programs have improved getting short sales approved.
But to be technical, here's the definition:
•A homeowner is 'short' when the amount owed on his/her property is higher than current market value.
•A short sale occurs when negotiation is entered with the homeowner's bank/lender, to accept less than the current mortgage loan balance at closing. The property is then 'sold short' the difference of the loan balance - new sales price.
For homeowners to qualify for a short sale, they must have a hardship.
•Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
•Monthly Income Shortfall – In other words: "You have more monthly expenses than income." A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
•Insolvency – The bank/lender will want to see that you do not have significant liquid assets.
This is a complicated process that takes the expertise of experienced professionals. I hold the CDPE® Designation and am ready to identify all possible options and assist in the execution of a short sale transaction.
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!
Ryan Kessell
REALTOR®, Certified Distressed Property Expert®