“Underwater” (you owe more than your house is worth) on your home and facing foreclosure?
Short sales can be a simple way to relieve the debt left over from what’s owed on your mortgage. If you choose to go this route, your credit score will only show a pre-foreclosure status and you should be able to apply for a new home after two years, depending on the bank, so the financial impact is minimal in comparison to foreclosure, and there are no fees.
While short sales are often a good alternative, they can also be trying and time-consuming if not executed properly.
Knowing what you’re doing is key.
So, here are 4 ways to ensure a stress-free short sale:
- Make Sure You’re Eligible
Being clear on the eligibility requirements for a short sale will help increase the likelihood of it being approved by the bank. Here they are:
- The house must be underwater.
- The owner must be behind in their payments.
- The owner must be facing hardship (in other words, the owner can’t be behind on their payments but have 100k sitting in their savings account).
Unless your lender agrees to waive the deficiency, the balance will be left on the loan after the sale, meaning that you could receive a collection letter for the difference between what the house sold for and what was owed on the mortgage months or years after the sale.
So, you always want to ask to negotiate a waiver to release you of the liability on the remaining balance of the loan. There may be a fee to do it, but it’s nominal.
You’ll just need to call your lender and determine the name of the negotiator.
- Consult with a Real Estate Lawyer & Accountant
If you don’t understand the contract you’re signing, it’s best to talk to a real estate lawyer. They may be able to help you avoid any complications (that a real estate agent may not be aware of).
You’ll also want to call an accountant to discuss any possible tax ramifications.
Leaning on pros is a good way to avoid any unpleasant surprises – regardless of the type of real estate transaction.
- Talk to a Professional Home Buyer.
If a short sale has become a big struggle for you, professional home buyers are good people to call. Most are happy to give you guidance and tips at no cost or obligation.
If it makes sense to do so, they may even buy your house from you fast for cash and do all the work for you, so you can quickly get out from under your mortgage – without having to worry about future complications.
Need help with your short sale? We’re happy to see what we can do. Our advice is free and there’s zero obligation. Just call us at (832) 802 – 4575 or fill out the form below. We’ll get back to you quickly!