Why use a short sale? What is it and how does the process work? Preventing foreclosure is the main reason…
Typically, homeowners/sellers use a short sale when they are behind on payments – normally more than 2 months behind and there’s not enough equity to sell it on the market or the property is worth less than what is owed. Without a lot of equity or the ability to make payments, the seller often finds themselves in a difficult place of facing foreclosure or losing money selling it on the market.
In these situations, a short sale benefits the seller because it prevents foreclosure and keeps foreclosure off of their record. It also prevents the negative effects to credit scores. When the short sale closes, the house is off their record.
Q: So how do one short sell a house?
A: By hiring a team that specializes in short sales.
Having a short sale team doesn’t cost the seller anything out of pocket and they benefit because the team does the negotiations with the bank and gathers all the documentation. They work with the bank during the short sale process so the seller doesn’t have to deal with the frustration of the bank’s hoops and requirements.
Q: How long does it take?
A: A short sale takes about 6 months on average. During this time, however, the homeowner can stay in the house until it closes.
Q: Is there anything the seller has to do?
A: They have to let people looking to buy it see it because the bank will have it listed on the market.
Q: What if the seller doesn’t live in the house?
A: Many times, the short sale team will advise to have a tenant put into the house so it doesn’t sit empty. This prevents break-ins, vandalism, squatters, and keeps the property up as far as utilities and lawn maintenance. Always, this is at the permission of the owner.
Q: Do payments have to be made during the short sale process?
A: The seller is not required to make payments during the short sale process.
Q: Can the process be stopped or reversed once started?
A: If the seller catches up on their payments, they can stop the process.
Q: How does the seller know when the short sale is over?
A: Typically, the title company sends the closing documents out for signatures and then sends the closing documents a bit later.
An overview of the whole process:
1. Contact short sale team
2. Allow potential buyers to see the house.
3. Sign documents for closing at the end.
Knowledge credit to:
Realtor and Short Sale Expert
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