What is a Shortsale?
What is a Shortsale?
A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens' full amounts. Whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt. Any unpaid balance owed to the creditors is known as a deficiency. Short sale agreements do not necessarily release borrowers from their obligations to repay any shortfalls on the loans, unless specifically agreed to between the parties.
Why would my bank approve a short sale?
It costs the bank big money to complete the entire foreclosure process, it could lose more money than it could recover by agreeing to a short sale. The lender will evaluate the potential of making money or losing money in both foreclosure and short sale scenarios, when deciding on approving your short sale.
There are significant costs of the foreclosure process, plus the bank's costs of owning a home while waiting for a buyer. The bank will need to calculate the cost of owning a property including Attorney Fees, Utilities, Maintenance and Repairs, Property Insurance, and Holding Costs.
Add those costs to the interest already lost on the mortgage, and the bank is looking at a loss potentially adding up to tens of thousands of dollars. The costs keep adding up in the event the bank is unable to find a buyer quickly.
Is a short sale the best option for me?
If you have negative equity in your home, are behind on your payments, or may be unable to continue making payments, a short sale may work for you. If you are unable to sell your home for the amount you owe your mortgage lender on the balance of your loan, a short sale is one option to get your home sold.
A short sale is one potential option in avoiding foreclosure. Other options include loan modification and bankruptcy, among others. Because we are not attorneys, we do not give advice on which option you should pursue. We have found excellent local attorneys to refer you to if needed. We can, however, help you in the event you chose to short sale your home.
A short sale allows you to avoid foreclosure, and the hopelessness and anxiety involved.
Some of the benefits include:
- Avoiding foreclosure and the social stigma associated with foreclosure.
- Avoiding a foreclosure or bankruptcy on your credit report.
- You may be eligible to buy another home much sooner than with a foreclosure.
- You pay nothing to us for your short sale transaction.
- A FRESH START.