The Short Sale A home owner’s financial circumstances sometimes reach a critical point where the ability to meet their mortgage obligations seem impossible; foreclosure may emerge as a pending outcome. These reasons may stem from a downturn in the economy thus loss of income due to unemployment, divorce, even a catastrophic illness. The Short Sale could be an option to foreclosure for the home owner. At any rate, one should keep open communications with their lender, seek legal advice with a attorney and speak to a real estate agent who has experience with Short Sales. Definition of Real Estate Short Sales: The short sell is when a property is sold, and the lender has agreed to accept a reduced payoff, meaning the lender will release the current lien that is secured to the property upon receipt of less money that is actually owed. Example: If the unpaid balance of a loan is, say, $150,000.00 and a property has an offer of $130,000.00, under a short sale the lender might accept the $130,000.00 as payment in full. Often, the lender considers a short sale to be a smaller financial loss than foreclosing. For the home owner, avoidance of a foreclosure to their credit history could be considered an advantage. The home owner must realize that the shortage in the amount owed is not extinguished unless the settlement is clearly indicated in the acceptance of a buyer’s offer. Again, it is wise to seek advise from an attorney and an experienced real estate agent. Process of the Short Sale: This process is meant as a guideline to what most lenders expect but your lender may demand more or less documentation. The following shows you, generally, what actions are expected for you to provide. Call the Lender: Let them know you are considering a Short sale and listen to all their directives. Submit a Letter of Authorization: What is required typically, is an authorization to for them to release your personal information. Preliminary Net Sheet: This will be an estimated closing statement that shows the sales price you expect to receive and all the costs of the sale, loan balances, outstanding payments due and late fees, including the real estate commissions. Your agent or attorney should be able to prepare this for you. Hardship Letter: A statement of facts describes how you got into the financial bind and asks the lender to accept less than full payment. Lenders an not usually to dishonesty or criminal behavior as reasons. Proof of Income and Assets: Be truthful and honest about your situation, disclose all your assets. Include savings accounts, market accounts, stocks/bonds, cash and anything of tangible value. Copies of your Bank and Market Accounts: If these apply, unaccountable deposits, large cash withdrawals or an unusual number of checks, advisable to disclose each of those line items. Comparative Market Analysis: If a drop in the housing market is reason you cannot sell your property to cover the mortgage, you should have a qualified real estate agent prepare the CMA. Purchase Agreement and Listing Agreement: Provide to the lender the purchase offered form the prospective buyer, and a copy of the listing agreement with your real estate agent. It may be suggested here; consider negotiating with the lender not to report adversely to the credit reporting agencies, but remember, the lender is under no obligation to grant this request. The Anders Team has the experience to assist you in the marketing of your home and to help prepare your sale for submission as a short sale. We have been commissioned by numerous home sellers in the Columbus, Hilliard, Dublin, Worthington, Powell Ohio areas to provide real estate marketing of their property. We are readily available to offer assistance to the preparation and presentation of your short sale, call or E-mail us, we are available at your convenience! |
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