What is a Short Sale
According to the Certified Distressed Property Expert (CDPE) Field Manual a “short sale occurs when: A negotiation is entered into with the homeowner’s mortgage company or companies to accept less than the full balance of the loan at closing. A buyer closes on the property and the property is ‘sold short’.”
In today’s market, mortgage companies are increasingly encouraging and accepting short sales instead of affecting foreclosures. Lenders spend thousands more to foreclose on a property than accepting a short sale. In conjunction with stricter governmental guidelines, mortgage companies are worker harder to increase efficiencies and speed of the short sale process. It is certainly getting better.
Qualifying for a Short Sale
In order to qualify for a short sale a homeowner must first be able to prove a valid financial hardship. Wanting to sell when you owe more than the house is worth does not qualify. Second, the homeowner must not have liquid cash or assets that will pay down the mortgage. There have been cases where the homeowner can cover a portion of the short sale and the lender covers the remaining balance. The short sale process is terribly complicated and requires expertise only gathered through specialized training. A licensed Realtor® with the CDPE designation behind their name is a homeowner’s best chance of closing their short sale and avoiding foreclosure. Contact the author for a CDPE in your area.
A Common Short Sale Myth
Lastly, there have been many reports, both nationally and locally,
stating a foreclosure and short sale have the same outcome and effect on
a borrower’s credit. That is absolutely NOT TRUE.
Click here to see a free copy of our report
entitled, “Foreclosure v. Short Sale: A Homeowner’s Consequences”.
Jim Ellis – Re/Max Elite Realty
Jim can be reached at 410.569.4663 or jim.ellis@remax.net.
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