What is a Short Sale?
Today, many Americans are asking, what is a short sale? Although the process is complex, short sales can stop real estate from entering into foreclosure. For most, engaging in this type of real estate transaction can save borrowers' thousands of dollars and help prevent credit from being completely destroyed.
When people ask, "what is a short sale?" I try to keep the explanation as simple as possible. In a nutshell, short selling means the mortgage lender agrees to accept less than is owed on the mortgage note in exchange for selling the property quickly at a reduced rate.
If you are wondering why a bank would accept less than is owed, you aren't alone. Many mortgage lenders are holding an enormous amount of non-performing loans; meaning borrowers who are not making their payments.
Banks receive money from the United States Federal Reserve based on their profits. If the banks customers are not paying, the Fed can reduce or cease additional funding, leaving banks with little to no money to loan. Short sales allow banks to release non-performing loans and recover a portion of their losses.
Not all properties or borrowers qualify for short sale approval. Currently, no uniform standards are in place for short sales, so each lender establishes their own protocol. However, short sales are not available to borrowers who have already entered into foreclosure or those who possess equity in their property.
In order to qualify for real estate short sales, borrowers must be at least 31 days delinquent on their mortgage note; owe more than the appraised value of the property; and hold no assets which could be used to repay the loan.
Banks require borrowers to submit a short sale packet consisting of a variety of financial documents. Borrowers must undergo a financial audit to determine eligibility. Since lenders are taking a loss on their investment they scrutinize financial records to ensure the borrower is financially insolvent.
Another aspect of obtaining short sale approval involves submitting a short sale hardship letter. I cannot stress enough the importance of this letter. In my opinion, the letter of hardship is the most important aspect of obtaining approval and borrowers should take time to craft it carefully.
You can find numerous articles regarding short sales in my article library. Additionally, I have published "Short Sale Hardship Letter eBook Course" which provides step-by-step instructions for obtaining approval, along with sample hardship letters.
If you are struggling to pay your mortgage payments, you do not have time to waste. The short sale process takes several months to complete and must be initiated prior to entering into the foreclosure phase.
I strongly urge you to take time to browse the short sale article library to further understand the process involved. As they say, knowledge is power and in this case it could save you thousands of dollars.
If you have obtained short sale approval and need to locate a buyer to purchase your property, I encourage you to contact me. My team of real estate investors has engaged in hundreds of successful short sale transactions. We are particularly interested in properties located in Orange County, California, Washington, Arizona and Nevada. However, we will review properties across the country.
To begin the process, submit property information via the "we buy houses" forms. Upon receipt of your information, I will personally contact you to discuss available options.