WHAT IS A SHORT SALE? Simply put, when a seller accepts an offer for less than the amount of money the seller owes on mortgage(s), the lender may accept a short sale. There are no guarantees that a lender will accept an offer like this and it takes a great deal of patience to work through the paperwork and cooperate with loss mitigators at lending institutions to successfully complete one. 95% of real estate agents would rather not deal with these. Why? They are time consuming, have tendency to fall apart, and the agents lack experience and education to handle them. But the biggest reason real estate agents would prefer not to handle a short sale? They generally lose commission on them. Buyers Advice Please consider working with an experienced Realtor® who has handled short sale offers. You are probably buying a property for less than current market value for a great deal. However, banks have been known to add costs to your side of the settlement statement that could run you several thousand dollars extra at closing. It is not unusual to have to absorb some additional costs, be prepared to give some if necessary. Remember, the seller is unable to contribute and is not walking away with any of the proceeds. I believe Short Sales are the solution to foreclosures (which hurt everyone in the long run). All my educational training this year (2009) has been completed, specializing in this area only. IF WE CAN ELIMINATE FORECLOSURES AND STOP REO'S FROM INFLATING EXISTING HOUSING INVENTORY, MARKET VALUE WILL GO UP. This is healthy for everyone. Sellers Advice Before considering a short sale as your only solution, please speak with me regarding alternatives. If you have received a NOD or know you cannot continue to make payments, you should take action immediately to prevent foreclosure. Fortunately, in Michigan, we are one of 7 states that provide for redemption period of 30 days to 12 months after the sheriff's sale. If this is your primary house, a general rule of thumb is for you to stay there and not vacate the property. If you need to move, rent out your property. Abandonment will only accelerate the foreclosure process. The sooner you act will do much to preserve your credit rating. You may be able to renegotiate your loan and stay in your house if that is your desire. But know this - a foreclosure will hurt your credit rating for the next 15 years, far more harmful than bankruptcy. Also, be advised that if this is a second home or investment property, lenders and the current stimulus plan are more forgiving to primary residential home owners. In the long run, whatever you do to settle the debt, such as a negotiated short sale, will be less damaging to your credit. |