Homeowners whose mortgage payments are delayed oftentimes consider putting their properties in a short sale, but that is not always the case because a homeowner does not necessarily have to be delinquent in mortgage payments to have his or her home in a short sale.
Though being delayed in monthly payments could be a factor but that’s not the only reason for putting a property in a short sale, a homeowner could be facing financial difficulties due to loss of income, divorce or medical reason and would want to let go of the house because he could no longer afford to pay for mortgage.
Basically, a short sale is a property that sells for less than the balance owed on its mortgage and this occurs when the mortgage balance of the property, it may be a house or even a vacant lot is greater than its market value.
However, there are still a lot of misconceptions about short sale, one of which is that the bank would rather have your property foreclosed than be put it in a short sale. Well generally, the bank would prefer to put your house in a short sale than in foreclosure because having a property in it would cost them more money with each transaction and less in a short sale.
Another common misconception is, it is impossible to get approval for a short sale transaction. But in reality, short sale has become more streamlined and lenders have become more knowledgeable and are willing to work with homeowners to close these types of transactions.
Most people often think that a short sale takes a very long time to close, but in reality that is not always the case. Lenders would do their best to refine the short sale process to close the deal in a short span of time. They themselves would want to sell the property fast since each time that passes is money lost.
Oftentimes, people think that buyers are not interested in buying short sale homes and putting their property in one is a waste of time, energy and resources, but this is quite not true since most buyers nowadays are specifically looking for homes in short sale lists. Mainly because short sale listed homes are more affordable and easier to acquire.
There is also the misconception that homeowners who put their homes in short sale will not be able to buy a home in five to seven years. But that is not really true; it all depends on the lenders. Actually, there were people who were able to buy a new home in as short as 24 months after putting their previous homes in short sale.
Homeowners also think that they couldn’t afford to pay a real estate agent in processing the short sale, wrong again because it is actually the lender that pays the real estate agent’s commission. This for his/her services by determining the type of the short sale from Fannie Mae HAFA to regular, non-GSE HAFA to a traditional short sale.
Then realtor gathers necessary papers and documents to package the short sale and to be submitted then to the bank, but sometimes they would get the services of a third party.
The agent helps the seller price the short sale home at an attractive price for prospective home buyers, but it should also be enough to satisfy the bank. He/she then puts the home in the market and submits all offers received to the seller.
It is also the duty of the agent to negotiate in behalf of the seller, but in some cases if the seller wishes to hire the services of a lawyer he may do so but oftentimes the services of a realtor is enough.
Lastly, the agent then submits the short sale approval to the seller; usually sellers want a release of liability and no deficiency to a short sale. However approval of the short sale is governed by state laws, meaning conditions and transaction process may differ depending on the state which the seller also needs to research ahead of time.
- How To Achieve Short Sale Success (massrealestatenews.com)
- Why do a SHORT SALE over a FORECLOSURE? (blancoryan.wordpress.com)
- Why Do Short Sales Take So Long? (johnbarrosorealestate.wordpress.com)