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SHORT SALE

If you are facing foreclosure and can no longer afford your home, you may qualify for a Short Sale—even if you don’t think you can (or haven’t been able to) sell your home. As circumstances in our lives change, some foreseen and some unforeseen, we learn to adjust so we can start the recovery process sooner. The more you know, the more you can make an informed decision.

What is a short sale?

A short sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a short sale, you can sell your home and pay off all (or a portion of) your mortgage balance with the proceeds. Depending on your situation, you may be required to make a financial contribution to receive a short sale.

A short sale is an alternative to foreclosure and may be an option if:

  • You are ineligible to refinance or modify your mortgage

  • You are facing a long-term hardship

  • You are behind on your mortgage payments

  • You owe more on your home than it's worth

  • You have not been able to sell your home at a price that covers what you still owe on your mortgage

  • You can no longer afford your home and are ready or need to leave

What are the benefits of a short sale?

  • Eliminate or reduce your mortgage debt

  • Avoid the negative impact of foreclosure

  • May be eligible for relocation assistance in some cases

  • Start repairing your credit sooner than if you went through a foreclosure

  • May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (up to 7 years)

What is the process for a short sale?

If you qualify for this option, the process is similar to a normal real estate sales transaction. You will work with a real estate agent to market and sell your home. However, your mortgage company will also be working with you and your real estate agent every step of the way to:

  • set the sale price (based on current market value),

  • collect financial information and negotiate with other lien holders (i.e., your second mortgage company) if applicable,

  • review acceptable offers,

  • agree to the terms of the sale once a buyer is in place, and

  • work with the buyer’s real estate agent and mortgage lender to finalize the sale.

In some cases, you may be eligible to receive relocation assistance to use toward your moving expenses and to make the transition to new housing easier.

A short sale may take up to 120 days, but this could be shorter or longer depending upon your specific situation. If you are unable to sell your home, you may be able to transfer the ownership of your property to the owner of your mortgage (also called a Mortgage Release or Deed-in-Lieu of Foreclosure).

TAKE ACTION

  1. Speak to a Short Sale Specialist regarding your options

  2. Gather your financial information

  3. Explain your current situation

  4. Contact your mortgage company

How vital is it to work with an experienced Short Sale Specialist?

For many reasons, choosing a Realtor who has experience working the short sales makes a tremendous difference. Given the complexity of paperwork and negotiations with several different parties, it is essential that you work with an experienced Realtor with expertise as a Short Sale agent. Working with an agent who understands the short sale process saves you stress and time spent dealing with obstacles that often come up along the way. A skilled agent will be able to prepare for obstacles and move through them quickly. Ultimately, your agent can mean the difference between a successful short sale, which allows you to start the recovery process, or a huge frustrating disappointment, which puts you at risk of foreclosure.

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