Real Estate “Short Sales” have been getting some attention in the news lately. But just what is a “Short Sale?”
Simply put, a short sale is the sale of a mortgaged property that results in the mortgage holder receiving less that what is owed to them.  The mortgage holder is “shorted” part of the mortgage balance.

In order to do a short sale, the bank or mortgage company must agree to it. But why would they agree to take less money?

The answer; banks don’t like owning, maintaining or selling houses.  It interferes with their main business of lending, managing and investing money.

If you find yourself in the position of having to sell your house and you don’t have the equity in your house or cash reserves to pay the mortgage off in full, a short sale may help you out.

Here’s how to go about doing a short sale, step by step:
1. Determine the current market value of your home.
2. Add up all of the selling costs you will need to pay.
3. Find out what the payoff amount is on your current loan(s).
4. Do the math, subtract the loan balance &  the selling costs from the market value.
5. Call your lender and ask for the “loss mitigation” department or a supervisor. Explain your situation to them.
6. Ask them what their procedures are for a short sale.  If they are willing to work with you, get all the forms and requirements and see if you can work out an agreement.  Be prepared to convince them your case deserves consideration. They will probably want a financial statement with all your bills and assets shown.  They may even want to see your household budget.  Don’t take it personally, it’s just business.
7. Sell the house. The bank will probably be involved with most of the contracts and offers.

The biggest mistake made by home owners in financial trouble is not getting in touch with their lender.  Almost all lenders would rather work things out with you than take back your home. Especially in today's market.

Questions? Comments?  Give us a call or email.  We love to talk real estate!