Short Sales Homes
'Short sales homes' has become the buzzword of the day within the real estate arena. Word has gotten out that borrowers who have fallen behind in their mortgage payments can sell their house for less than they owe and walk away scott-free. Sounds great, but it's not 100-percent true.
Short sales homes are sold for less than borrowers owe on their mortgage note. But, the process is no walk in the park. Most banks want evidence there is a buyer in place before they will even discuss the option of short selling property. It is not easy to locate a realtor willing to tackle a short sale.
Oftentimes, real estate agents must give up their commission to complete the deal. There is a tremendous amount of work involved in orchestrating short sale transactions. Few realtors want to work for free while engaging in triple the workload of a normal sale.
Not every lender engages in short sales. Those that do require borrowers to provide a mountain of financial documentation proving they are financially insolvent. The process is intense and generally takes four to six months to complete.
Short sale transactions are handled through the lender's loss mitigation department. A loss mitigator is assigned to work with the borrower throughout the process. The first step usually involves submitting a short sale hardship letter outlining events that caused the borrower to become delinquent on their account.
The hardship letter is an extremely important element. It should include specific details, while being concise and to the point. There is no need to include every detail of your life. Stick to the facts. Include any action taken to rectify the situation. This could include anything from using public transportation and eliminating cable TV, to switching utilities to budget plans and shopping at discount stores.
Now is not the time to rack up unnecessary expenses on credit cards. Loss mitigators frown on borrowers who claim to be broke, yet spend $100 a week going out to dinner. Lenders will be examining financial records under a microscope, so keep spending to a minimum.
Not all properties or borrowers qualify for short sale approval. Many factors are involved including loan balance, appraised value, condition and location of property, borrowers' financial status, and if it makes economic sense for the lender to accept a loss on their investment.
There are numerous pros and cons to short sales homes. After consulting with loss mitigators, realtors, attorneys and mortgage lenders, I compiled the information into a concise, step-by-step guide which can improve borrowers' chances of obtaining approval ten-fold. The Short Sale Hardship Letter eBook Course is currently available at www.ShortSaleHardshipLetter.com.
Additionally, our short sales homes article library includes hundreds of articles on a wide range of real estate topics. Sellers, buyers and investors can benefit from our ever-expanding resource center. We encourage you to subscribe to the article feed located on the upper right corner to receive instant notification when new articles are published.
Last, but not least, I recently implemented a short sale program. As mentioned earlier, short sales are complicated and confusing. I am only able to accept a limited number of participants in this program. For consideration and additional details, submit information about your property via the "we buy houses" form.
Published on July 06, 2009 at 01:06 AM