A short sale is a way for home owner who is behind on their mortgage payment to get their home sold and avoid foreclosure. Short sales didn’t used to happen much back when people people used to put at least 20% down to buy a home, but in the last few years, because of all the more exotic loan programs, many people were able to buy homes for no money down, or even in some cases, where the loan was over 100% of the home’s value. As you can imagine, in a market where prices have been flat and even declined in many areas, that was a recipe for disaster.
In a short sale, the seller is negotiating with the bank to allow them to sell the home for less than is owed. The seller still signs the contract and closing documents, but he/she does not walk away with any cash at closing. The contract is still subject to final approval by the bank(s) because they have to agree to take less than what they are owed.
Are you facing foreclosure? Call me today at 864-642-1645 to see if a Short Sale is right for your Situation!
Once a valid offer is received, the seller is required to write a hardship letter stating why they should be eligible to do a short sale. They must also provide bank statements, paycheck stubs, and a financial statement to show that they cannot make the payments. In addition, the seller’s real estate agent must provide a market analysis of the most recent comparable sales to justify the selling price. The bank will also send out their own appraiser some time during the process to get an independent analysis done. The bank normally agree to take less than the mortgage amount because they know the alternative is likely that the seller won’t be able to keep up with mortgage payments, which can lead to foreclosure – and that’s an even worse option for the bank.
One of the biggest risks sellers face on short sales is that they won’t be able to successfully negotiate with the bank to have them approve a short sale, or reduce the money due on their mortgage. Because of this, you need a savvy Greenville SC REALTOR like Victor Amadi who is experienced with successfully completing short sale transactions. Be sure to contact Victor at 864-642-1645 ext. 102 with any questions.
In a short sale, the banks can take a long time to respond to your offer. This can take weeks or months – yes months, which can be very frustrating for the buyer. Until the bank approves the sale, the buyer is in limbo, not knowing whether they will actually be able to buy the home. There is, unfortunately, no way to speed up the process. The banks won’t even talk to the real estate agents or sellers in the meantime to let them know what the status of the approval is. Many buyers will walk away from short sale contract because of the delay by the bank, and sometimes this delay will cause the property to go to foreclosure sale before an approval can be generated.
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