Avoid foreclosure with a short sale!
What is a short sale? Glad you asked.
A short sale is when the bank allows the borrower to sell their property for less than what is owed. In cases where there are already final judgments against the owner, the balance owed includes all of the interest that has not been paid since payments stopped, plus taxes, insurance, legal fees and other charges. Thus the only way that the borrower can sell their house is by asking the lender for a payoff short of what is owed.
Banks realize it’s much better to accept a short payoff than to go through the process of taking over the property and owning an asset that is usually far away from where they are located.
A short sale is another way of getting rid of a non-performing loan. Instead of foreclosing on a homeowner, taking a property back and trying to sell it as an REO, the lender will allow the home owner to sell the property for less than is owed.
The next question people commonly ask is what happens to the balance of the money owed? The lender can pursue a deficiency, ask the homeowner to sign a promissory note or give the homeowner a deficiency waiver. With a deficiency waiver, the homeowner does not have to pay back anything.
Will you receive a 1099 for the amount forgiven? If it is your principal residence the answer will generally be NO.
What is the benefit of a short sale? The homeowner avoids foreclosure with all the negative consequences that it brings and they actually have a sale. The homeowner walks away owing the bank nothing.
Most banks give relocation assistance to help homeowners with moving expenses. To qualify for a short sale, you must be behind in your mortgage payments, provide evidence of financial hardship, and have little or no equity in the property.
A short sale is not a simple real estate transaction. Not only are there more parties involved than in a normal sale, but there is a lot of negotiation needed to get the short sale approved. The most important part of a short sale is making sure that you get the deficiency waiver needed to walk away owing the bank nothing. Shirley and her team have experience and know-how needed to work the system and get you what you need.