Short Sale is the new buzz word. With all the talk about short sales today, you might be asking yourself that very question.
First, you should understand what a short sale is. A short sale occurs when the mortgage lender agrees to take less than the full balance owed on your mortgage to sell your property. You may ask "why would a lender do that?" A lender will agree when your financial situation is causing you to fall behind, or sometimes the potential to fall behind, in your mortgage payments, thereby resulting in a foreclosure. Lenders prefer short sales over foreclosures because they lose less money. If a lender has to foreclose, it costs them money in foreclosure fees, attorney and broker fees, not to mention the decrease in the property value.
Secondly, take a good look at your situation. Are you experiencing a financial hardship causing you to fall behind in payments? Or due to the market decline, is your property worth less than you owe on it? Your hardship could be the result of a job loss, divorce, medical bills, increasing interest rates, or ballooning mortgage payments. These are the most common, although each situation is unique. If you find yourself in this situation, what are the odds you'll be able to correct the situation? If so, how many months before that will happen? Each month of late pays or no pays digs you in a deeper and deeper hole.
If you have a lot of equity in your house, you can probably sell it for enough to cover what you owe and the commissions and closing costs. If not, it's almost impossible in today's market to sell quickly for what you owe on it AND cover all commissions and closing costs. That's when a short sale is advantageous. The consequences are not nearly as negative as a foreclosure.
Call us and talk to a professional today about your options.
