The Short List on Short SalesPosted Tuesday, March 4, 2014
With the current economy, real estate owners are finding themselves in sticky situations when it comes to keeping up with their mortgages. If the possibility of foreclosure is in your future, you might want to determine whether you’re a candidate for a short sale.
A short sale is when the owner and the bank agree to sell the home for a loss. Short sales are more beneficial to the homeowner’s financial future because it tends to damage their credit score by reducing it around 100 points instead of the 300 points a foreclosure might inflict. If you are starting negotiations with your bank to try and list your home as a short sale, consider the following three qualifications.
Foreclosure has NOT already taken place. A short sale can still happen during the foreclosure process if you’re still in pre-foreclosure and you have only received notices from your bank. However, if your home is already in foreclosure and is up for auction, it is too late.
You have NOT filed for bankruptcy. If you have, then you are ineligible for a short sale. Banks cannot pursue collection of debt if you’ve filed for bankruptcy — so you can’t work with them on selling your home.
You owe more than your home is worth. The best way to determine whether your home would qualify for a short sale is to ask a real estate agent to estimate your home’s current value and compare it to how much you still owe. If you owe more than it’s worth, then you may qualify for a short sale.
Don’t wait until it’s too late! If you’re having trouble paying the mortgage on your real estate and meet the three qualifications above, it might be time to talk to your bank.
This subject can be extremely confusing, so please call me if you are searching for more short sale information.