Whenever you think of buying a property and get in touch with some real estate company or property management firm. They would assist you in getting best of the deals. These days, you’ll find several properties on short sale. But do you exactly know what short sale is? For instance, you purchased a property on mortgage however; you didn’t or could not pay some of the installments. Now, the lender will sell the property to the third part at lesser amount than the debt you owe. Generally, nothing needs to be paid by you (borrower) and mortgage debt will be removed. Now must be wondering, how the process of short sale takes place.
Firstly you should get in touch with the lender in order to check if your property qualifies for short sale or not. In case, you’ve assets with the value that can pay off the mortgage amount, lender will not approve the short sale under any circumstances. If the value of your assets cannot bridge the amount of the sale price of the property and the amount you owe then lender can get the deficiency judgment against you. If you want to get approval for short sale without any deficiency judgment, you should hire an investor with good experience in short sale. While working with a short sale investor, you’re most likely to get approval for short sale of your property. In this case, you’d need to contact a reputed investment company else you can list your property with a realtor so that potential buyers can know about your property.
After finalizing the offer of short sale with the investor or the buyer, deal would be finalized with the approval of the lender. You can represent more than one offer to the lender and he/she will choose the offer that’d suit him/her in best possible way. But before asking your lender for the short sale, you should check whether you qualify for the short sale or not. You can show financial hardship and prove that you would not able to pay the mortgage payment from now on. However, you’d need to show evidence to back up your statement of financial hardship. The valid reasons of not paying the mortgage amount could be death in family, job loss, going through a divorce, illness or wage reduction. To provide documented proves of financial hardship to the lender, you can show pay checks of last two three months, bank statements or the tax return. You’d also need to submit sale and purchase agreement and brokerage listing agreement.
Let’s talk about the advantages and disadvantages of a short sale. Biggest advantage of short sale is that you can save your home from foreclosure as well as your credit. Disadvantage of short sale is that time frame (around two to three months) which is involved in its processing. If you’re already delinquent on your mortgage payments and short sale is under processing. You might get a letter for foreclosure of your property.