It’s a sale where the debt owed combined with the costs associated with the sale is more than the property’s market value. The lender may be willing to agree to allow the property to be sold for less than the balance of the loan, which is called a "short sale". The seller would need to prove that they are financially incapable of paying the loan including providing financial documents , an asset & liability statement, and a hardship letter to the bank.
As a buyer, it could be an opportunity to get a great deal. But there are no guarantees that it will close. Some close, but some do not. One of the biggest problems are that sellers are waiting until the last few weeks before the foreclosure sale date, and then trying to get the short sale agreement approved by the bank. The bank has a "loss mitigation" department to handle these accounts, and sometimes they work very quickly. But most lenders are so overburdened by these requests, they simply are not able to get to the file before it is too late!
So, what is a seller to do? If your home is in trouble and you are facing foreclosure, RUN, don't walk, to the phone and call me today! Getting the required paperwork completed, submitted and approved can take a week or two! If your home is scheduled to be sold in 3-4 weeks, it could be too late. Make sure not to attempt this feat without the advice of an agent with experience in short sales. There are many details that cannot be overlooked, such as protection clauses to protect you from the possibilities of deficiency judgements.
Buyers should know that the opportunity is there if you are willing to take the chance. There are no guarantees that there will be a successful close.
The good news is that banks are getting somewhat more efficient at processing short sales. It is also rumored that banks have too many properties on their balance sheets, which affects their regulatory requirements and may encourage them to be more agreeable to short sales in the future.
contact Kimberly Wilson, Your Dawsonville Real Estate Specialist!
As a buyer, it could be an opportunity to get a great deal. But there are no guarantees that it will close. Some close, but some do not. One of the biggest problems are that sellers are waiting until the last few weeks before the foreclosure sale date, and then trying to get the short sale agreement approved by the bank. The bank has a "loss mitigation" department to handle these accounts, and sometimes they work very quickly. But most lenders are so overburdened by these requests, they simply are not able to get to the file before it is too late!
So, what is a seller to do? If your home is in trouble and you are facing foreclosure, RUN, don't walk, to the phone and call me today! Getting the required paperwork completed, submitted and approved can take a week or two! If your home is scheduled to be sold in 3-4 weeks, it could be too late. Make sure not to attempt this feat without the advice of an agent with experience in short sales. There are many details that cannot be overlooked, such as protection clauses to protect you from the possibilities of deficiency judgements.
Buyers should know that the opportunity is there if you are willing to take the chance. There are no guarantees that there will be a successful close.
The good news is that banks are getting somewhat more efficient at processing short sales. It is also rumored that banks have too many properties on their balance sheets, which affects their regulatory requirements and may encourage them to be more agreeable to short sales in the future.
contact Kimberly Wilson, Your Dawsonville Real Estate Specialist!
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