Short Sale

What is a short sale?

A short sale is the process where a real estate investor buys a home of a homeowner who is up side down on his or her mortgage for what he or she owes the bank. A short sale is only done when a homeowner is upside down on his or her mortgage, not when the home has some equity in it.

The Short Sale Process

Instead of the homeowner listing his or her own real estate property on the market and selling it at market value, the homeowner can contact a short sale real estate investor and have the real estate investor do a short sale for him or her. The real estate investor will help the homeowner build a case to convince the bank why they should take however much the real estate investor is offering and forgive the rest of the money that the homeowner owes them.

For example, a homeowner owes $120,000 for a house that is only appraised for $100,000. The real estate investor will write a letter to the mortgage company convincing them how the homeowner cannot afford to repay the whole $120,000. The real estate investor will make an offer to the bank based on the market value of the house in its current condition. If the house needs repairs, the real estate investor could offer the bank $60,000 or the real estate investor could offer the bank $80,000 if the house is in pristine condition.

What the real estate investor offers the bank does not matter to the homeowner. The only objective of the short sale is for the bank to accept the real estate investor's offer, no matter what price and forgive the balance of the loan. That means, the bank will not come after the homeowner for the difference (the $15,000 in our earlier example). The difference in what the bank gets paid and what you owe is called deficiency judgement.

Benefits of short sales

When you are up side down on your mortgage, a short sale has many benefits. Some of the benefits of a short sale are listed below.

• If you are in foreclosure, your foreclosure will stop
• Your property will not go to the Sheriff's Sale
• You will save your credit because short sales stop foreclosures
• You most likely will walk away free and clear of debts to the mortgage companies (first mortgage, second mortgage, and other mortgages)
• You will have some money to start over
• You don't have to spend time, money, and efforts to list your house on the market and wait for it to sell

If you owe more than your house is worth, a short sale is a pretty good deal over all. Call us or email contact@home-solutions.info for more information on our short sale program or to sign up for our short sale program. You can also use our Short Sale sign up form to let us know of your interest in have a short sale done.

We also offer a risk free, confidential, FREE short sale consultation. Contact us for details and appointments.