A Short Sale is where a seller chooses to sell their home in a hurry in order to get out of their mortgage. The lender has agreed to take less than the amount owed by the borrower because there is not enough equity in the property to cover the loan balance. In a short sale the lender usually forgives the remaining balance of the mortgage loan. The goal of a short sales is to avoid foreclosure and therefore the sales approval process may take longer than a traditional mortgage approval.
Advantages to purchasing a Short Sale
* Competitive and often below market prices
* Short Sale homes are usually in better condition than foreclosed homes
* The homeowner can provide you with more information about the home
Is a Short Sale the Right Choice?
If you are a homeowner that needs to sell your home in a short sale, you may qualify with your lender under the following guidelines:
* You owe more than your house is worth or has been appraised for
* You are unable to afford your current monthly mortgage payment
* You have tried and are unable to modify your current loan
* You have experienced a reduction in income or are unemployed
* You have received a job transfer and have to move
* You are going through a divorce, have a medical emergency or death in the family
How long does it take to to complete a Short Sale?
* Approximately 2 weeks for bank to acknowledge receipt of offer
* Approximately 2 weeks for bank to order an appraisal
* Approximately 2 - 4 weeks for bank to assign a negotiator
* Approximately 2 weeks to receive bank approval
* Approximately 4 - 6 weeks to close the sale
How does a Short Sale affect your Credit
* Short Sales affect your credit less than a foreclosure
* You may be able to secure a loan on a new purchase in less time