Simply put, a short sale is an agreement between an owner of a property and their lender where the lender will allow the owner to sell the property for less than what is owed. They are a tool for grantor’s (borrowers) and lenders (trustees) to mitigate loss, or in everyday terms- avoid foreclosure. Sound good? Well, there are many advantages to doing a short sale but there are many headaches too. The process can be long and tiresome, but there is light at the end of the tunnel; avoiding foreclosure.
The situation arises for a number of reasons, but getting the bank to agree to lower their payoff amount most likely will result in the damage of your credit, but, the situation far better than having a foreclosure on your record. Short sales are becoming a way of life in the industry now since so many homes have been overvalued and so many owners have been guilty of serial refinancing and have taken the equity out of their homes so many times. There are many reasons a homeowner may be facing foreclosure, but whatever the reason, a short sale may be the way out.
Since the short sale process is complicated, I’m not going to cover how to do it in this article. It takes the knowledge and expertise of an experienced agent – you may want to forget about hiring your nephew who just got their license on this one. It takes over communication with the banks and since each bank is different they have their own particular process and time frames to get you an answer.
Because the bank doesn’t want to be the new owner of your home, they are typically willing to work with you to lower their payoff amount. But, they aren’t going to do it on a wimb; they have to see that there is some sort of financial hardship on your behalf, and if your payments are showing up regularly, then they percieve that everything is ok. If you are in a situation where you have been missing payments, now is the time to wake up! Contact your agent and get the ball rolling so that you can get the propery moved on to the next owner.
If you have found yourself in some sort of financial hardship with your home, don’t panic, but don’t bury your head in the sand either. Give me a call and I can consult you on how to solve the problem. Also, if you are in this situation, you aren’t alone, a recent report showed that nearly 50% of all homes under contract to be sold in Boise, Meridian, Kuna and the surrounding areas are short sales.
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