What is a Short Sale?

A short sale can be a positive solution for property owners who owe more on their homes than they are worth in today’s market. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to the National mortgage crisis, banks and lenders have become much more negotiable. Recent changes have pushed lenders to streamline their short sale process, and have made it more positive for both buyers and sellers.

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 lender (or lenders) 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.

A short sale isn’t automatic. Homeowners must qualify by falling 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.

This seems simple enough, but it 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, when possible, assist in the quick 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. I’m here to help.

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

One Response to What is a Short Sale?

  1. Albert & Colleen Lum says:

    We have a condo/hotel at the Kauai Beach Resort. The rents do not cover our interest-only loan and high HOA. We’ve been carrying the loan for over 2 years and can no longer support the “investment”. Presently, we’re working with a local agent but feel we need someone who can work with us during the short sale process. I found your website through Google and like your video presentation. Please contact me at 562-434-4380 for more information. Thanks.

    Colleen

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s