Short Sales and Foreclosures

Selling a Home      Short Sales      Foreclosures

 

       Before doing a short sale or if you are in default on your mortgage and heading for foreclosure - contact a real estate lawyer for advice. Real estate agents are NOT lawyers.

 

   Short Sales

 

What is a Short Sale?

When a property owner can no longer afford to pay his mortgage or his mortgage is higher than the current market price, and the lender is willing to sell the property for a price less than the balance of the mortgage amount, this is known as a short sale. However the borrower is not necessarily released from paying the remaining balance of the original loan which is known as a deficiency unless it is written into the sales contract. Remember, always seek legal counsel before attempting a short sale. The best time to do a short sale is when your property is in pre-foreclosure state.

Not all sellers and properties qualify for a short sale. Properties have to be worth less than the unpaid amount due to the lender. Sellers have to prove hardship as to why they can't pay and have no assets to sell to offset the non payment.

Many buyers today look to buy short sales....

Advantages

You may ask, why does the lender do this? What is in it for him? A short sale avoids foreclosure and foreclosure is not only expensive for the borrower but also for the lender. With a foreclosure, the borrower ends us up with very poor credit and the lender incurs expenses to foreclose, carry the house and then to hope to sell it in a timely manner. With a short sale, it is really a win-win for both and with the housing market in a slump and the prices falling, it is beneficial to attempt to do a short sale.

  Foreclosures
What is a Foreclosure?

A foreclosure is the legal process where the lender can take back the property and sell it at auction because the borrower has defaulted on his mortgage payments (promissory note signed at settlement). There are stages of foreclosure and the borrower can stop the foreclosure by repaying what he owes including any fees incurred. Many times the lender will renegotiate the loan at a different interest rate if the borrower can prove hardship. Usually the lender will try to work with the borrower. In any case, seek legal counsel if you are heading for foreclosure.


 


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