what is a short sale?

Asked by fkarelin, Ypsilanti, MI Wed Jan 23, 2013

I own a townhouse inAptos, Ca near the beach. I lost my job and cannot afford the maintenance of my home.

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Kathy Persha, Agent, Birmingham, MI
Wed Jan 23, 2013
A Short Sale is when your lender accepts less than what you owe as full payoff of your mortgage. A short sale can be an ideal solution for you. It allows your house to be sold at a reduced price that the bank will accept, a price that is a fair price for the current market. It avoids foreclosure for you and has much less impact on your credit score than a foreclosure. If foreclosure has already occurred and you are in your redemption period, a short sale will say that you had a problem and you dealt with it and found a solution. Short Sales can be done before and after the sheriff’s sale. If we are in the process of negotiating the short sale, we can actually get the sheriff’s sale postponed or cancelled while we are negotiating. It also allows us to negotiate with the bank the disposition of the deficiency judgment. Deficiency Judgment is the difference between what you owe the bank and what they get in the sale as a short sale.

The short sale allows you to sell your house. It will stop the foreclosure. You will not have a foreclosure on your credit report. Has less impact on your credit score than a foreclosure. May allow you to qualify for a new mortgage within 3 years or sooner in some circumstances and type of mortgage. It solves your problem. You can sleep at night once again. If you want more information feel free to call me at 248-930-0298. I specialize in working with people facing foreclosure.

Kathy Persha, Realtor
Nextage Advanced Realty
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Meena Gujral, Agent, Pleasanton, CA
Wed Jan 23, 2013
A short sale is a sales transaction for which a seller's mortgage lender voluntarily agrees to accept a loan payoff of less money than what is owed on the mortgage loan. In a short sale, the property may or may not be in foreclosure. However, homeowners may consider short sales as a viable option for avoiding foreclosure.

Meena Gujral
Help-U-Sell Achievers Realty
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Val Smith, Agent, Abilene, TX
Wed Jan 23, 2013
A short sale is one where the title has transferred and the sales price was insufficient to pay the total of all liens and costs of the sale - the seller did not bring sufficient liquid assets to the closing to cure all deficiencies.

In layman's terms...you owe more than the property is worth, so when you sell it, you will come up "short". It doesn't have anything to do with a quick or speedy transaction, in fact, it's just the opposite - it usually takes 3 to 6 months & sometimes longer for the transaction to close.
If you do believe you will be in a short sale situation, the first thing I would suggest is hire a REALTOR in your area that specializes in Short Sales. These transactions require lots of communication and documentation between your REALTOR and your lender. If you have an inexperienced REALTOR (especially on the listing side), it will make the transaction take even longer or it may never sell. In the mean time...you are getting deeper in debt.

When you hire your REALTOR, be prepared to answer some tough questions! Your REALTOR will have you gather information about your assets (real estate, stocks, bonds, bank accounts, etc), liabilities, the amount of our monthly expenses, pay stubs, W-2's, bank statements, supporting hardship information, and more...All of this information will be submitted with your short sale package to your lender, who will ultimately have the final approval on the sale of your house.

Don't lose hope, as REALTORS, we are prepared to handle situations like yours. Just grab your hat & hold on...it's going to be a wild ride!
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