subject: What A Short Sale Is and How It Benefits Homeowners [print this page]
A short sale is basically a sales process in which a homeowner's mortgage lender agrees on a total amount that is below what's actually due on the loan. By short selling your home, not only will the reduced payments be beneficial for you, but your lender will also have the assurance that they will get paid the amount agreed upon.
Who Initiates The Whole Short Selling Process?
Generally, it would be you by calling a Certified Short Sale Realtor, the homeowner, who will decide on whether or not to go for this. What you must absolutely need however is to arrive at a clear agreement between you and your lender which will be negotiated out with your realtor at the helm. For negotiations on the amount and other standard requirements such as the steps to becoming eligible for free assistance from the HAFA program, it is advisable to consult with a licensed realtor.
The Best Time.
You will find that short selling will be most beneficial during these times of financial crisis. If you indeed find yourself greatly affected in terms of keeping up with your mortgage payments, then short selling may be your best option. Constant late payments are an evident indication that you are likely to go through a foreclosure.
Credit Issues Solved?
How short selling will influence your credit will rely on some factors. First, how many months have you been late on your mortgage (before you sold your home)? Next, how did the agreement or negotiations go with you and your lender? In the perspective of your lender, was the debt truly satisfied? Then, it really depends on the negotiations that arise between the listing agent and the lender's negotiator. This process can take off anywhere between just 25 points and up to 125.
Getting Assistance
In most areas like Phoenix, Scottsdale, Peoria, Glendale, Sun City and Cave Creek, a realtor will be able to help you through the short selling process. While short selling is meant to take away your burdens and save you from foreclosure, the paperwork that needs to be done can still be tasking especially if you have never tried short selling before. A Certified realtor ensures that you actually do close a sale.
The General Steps Involved
Short selling is actually a very simple concept. You, the homeowner, would sign a listing agreement with a real estate agent in charge of short selling with third party authorization. The agent would then look for a buyer who creates an offer that is below the mortgage balance. If all goes as expected the seller and the seller's lender would agree on the buyer's buying offer. And finally, the sale would close when the buyer hands out the funds and the lender frees the lien, and the seller delivers what was agreed on.
A short sale is advantageous to in many essential ways. Enabling short selling helps prices to adapt faster to new data and minimizes the chances of price bubbles. It may also result in higher prices as investors develop more confidence that the prices are satisfying enough.
