There is a popular misconception that homes sold through a short sale are
Potomac, MD (PRWEB) August 26, 2008
In today's tough market ordinary homeowners are finding themselves stuck with ballooning and unaffordable mortgages. Facing a buyer's market and an upside down mortgage, many homeowners turn to short sales.
A short sale (pre-foreclosure) is a real estate transaction that nets less than the amount of debt owed on a property. In other words, an owner sells his/her home for less than the mortgage they owe on it.
Why would someone consider a short sale?
1. Will or have already fallen behind on mortgage payments
2. They are facing foreclosure.
3. Divorce or death of a spouse.
4. Sudden disability
5. Immediate and pressing need to relocate.
Marc Cormier, a Realtor with The Tania Ivey Real Estate Team and owner of http://www.help34.com closes more short sales in an average month than most realtors have done in their entire career. Mr. Cormier closed 3 short sales in a 2 week period in June 2008 alone, . Cormier offers the following advice for those considering a short sale.
1. Determine the value of your home. Don't take any guesses with this one and don't overestimate the value of your home. Play it safe, get an appraiser or real estate agent to determine the true value of your home.
2. Determine the costs of selling your home. Make sure you include all closing costs, necessary repairs and any agent or broker fees.
3. Determine what you may be able to sell the house for TODAY at a fire sale price.. Work with a Realtor to determine what range the other homes in your area are selling for and how your property fits into that picture.
4. Most importantly, work with an agent who has a track record of closing short sales. Ask the agent what experience they have and make them prove it.
If you find that the amount that buyers are willing to pay for your home is less than what you owe on your mortgage you may be a good candidate for a short sale.
"When I was closing the short sale at the Ritz Carlton in Washington DC, I was faced with 3 mortgages, past due condo fees and tax liens; but because I was able to prove that the short sale would benefit the bank, I was able to stop the foreclosure and get the entire deal done from start to finish in 28 days!" Cormier says. "Having a knowledgeable and savvy Realtor is essential to negotiating the short sale process with a bank," he adds.
Whatever you do make sure that you don't wait too long to explore you short sale opportunities. If your adjustable rate mortgage is resetting soon or you experience a job loss or other financial trouble, don't wait. As soon as you see any trouble on the horizon, act immediately.
Negotiating A Short Sale
Any bank that wants to remain in business tries to avoid taking a loss on the homes they finance. So how do you a bank to take a loss on your property?
1. Prove to the bank that the property cannot sell for a price that would cover the amount you owe on the mortgage.
2. Work with an agent to help you gather the evidence you need to show that the bank would lose money on this property if they foreclosed.
"If you want to improve the chances of your bank accepting a short sale you ultimately need to prove that a foreclosure on the property is imminent," says Keith Kelly, the host of a Sunday Morning talk show that discusses short sales and short refinance on 570 AM 8 am and on 1260 AM Wednesday from 6-7PM in the Washington DC metro area.
Whatever agreement you make with the bank regarding the short sale of your property you need to do two things.
1.Make sure you get it in writing!
2.Make sure that they forgive the difference between what you owe and what you sold the property for.
3.And for a purely educational standpoint visit http://www.Help34.com. I have yet to see a better, more practical site regarding short sales.
When you short sale your home, it is a slight mark against your credit; but remember it's much better than a foreclosure or bankruptcy.
"There is a popular misconception that homes sold through a short sale are "ugly" that couldn't be further from the truth. Homes in every neighborhood and every price range are being sold using a short sale. In our area they range up to $5,000,000 for a single family home. Imagine the discount a buyer of a 5 million dollar home will see" says Mr. Cormier.