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Facing a Short Sale

While it is a stressful decision for many families, a short sale may be the best solution, short of foreclosure, for homeowners who owe more on their properties than they are worth. Technically, a homeowner is ‘short’ when the outstanding loan is more than the current market value of the property. A short sale occurs when the homeowner finds a wiling buyer and then negotiates with the lender to accept less than the full balance of the loan at closing (typically to avoid foreclosure). Once the buyer closes on the property, the property is considered 'sold short' of the total value of the loan. The procedure requires stamina but it can yield favorable results for all. Organization and full disclosure will also help you manage through the process.

In the past it was rare for lenders to accept short sale proposals. With overwhelming market shifts, and changes in corporate policy, lenders have become much more willing to work with homeowners in distress, and since a short sale generally costs the lender less than a foreclosure, it can also be a way for the lender to reduce their losses. 

To qualify for a short sale, homeowners must prove all of the following circumstances there must me a hardship (financial, divorce, illness, relocation, job loss, etc)

Working with Representation
This is a complex transaction, and if short sale is an option you are considering, RE/MAX Momentum can certainly help you make the best of this situation. When interviewing potential agents, be sure to inquire about their experience with short sales and find out if they hold any designations for buying and selling distressed properties.

Most often a short sale is better than a foreclosure for credit and future financial liability.  People have a wrong belief that once it forecloses it is done!  Many times the bank will come back for the money owed.

It is also recommended that you obtain legal advice from an experienced real estate lawyer and discuss short sale tax ramifications with your accountant. If you do not know any of these professionals, your REALTOR® can recommend experts in these fields.

Selling Your Property as a Short Sale
If you have determined that a short sale is right for your situation, you need to initiate the process with your lender and your RE/MAX Momentum will have you collect all of the needed documents and forms and take it from here. 

  • Banks will pay reasonable closing costs and real estate commissions through the short sale.  

This information is meant as a guide. Although deemed reliable, information may not be accurate for your specific market or property type. Please consult a REALTOR® professional for more information on making a written offer.