What is a short sale? | Newjerseyshortsale

InWhat is a short sale? In recent years the emergence of Short Sale properties have swarmed the market, it is important to understand that banks are not in the business of owning Real Estate and in most cases it is in their best interest to Short Sale a property verses allow it to fall into Foreclosure. The average cost of a Foreclosure ranges from $35,000-$65,000, so allowing the short sale eliminates a lot of time and money for the lender.

Now keep in mind that the average loss mitigation representative has an average of 150 files on their desk and without a proper package; yours WILL be sent to the bottom of the pile. That’s why it is imperative that you work with an expert, remember a GOOD agent matters.

A home is a candidate for a short sale when all liens, plus costs of sale, exceed home’s value. These liens include mortgage liens, mechanics liens, tax liens, unpaid judgments, and unpaid HOA fees.

Think of a short sale as a form of pre-foreclosure sale in which the lender agrees to accept less than the loan amount to avoid taking the home back in foreclosure. The good news is that the lender pays the closing costs, commissions, title fees, and repair costs. The seller gets the home sold, the loan satisfied, and avoids foreclosure. There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a "short sale."

Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect.

There is a phrase that I tend to repeat when asked about short sale in real estate; and that would be “there is nothing short about a short sale”.

There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a "short sale."

When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more sense to foreclose. A financial hardship is very important to the short sale as the lender will want to know why the home owner can no longer make scheduled payments (such as illness, death or spouse, loss of employment, reduced hours etc…) this aides the lender in determining if the hardship is legitimate enough to allow the short sale to go through.

Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect.