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Understand the short sale process

A short sale can help you avoid foreclosure or sell a house that you're underwater on. Learn what you need to successfully sell your home.

If you’re about to face foreclosure on your home, you might have another option. A short sale allows you to sell your home when you run into trouble. While the process does affect your credit, it’s not as harmful as a foreclosure on the property would be. Short selling your home often benefits all parties: You get to move on from the property, the buyer gets a good deal on the home and the lender doesn’t have to deal with the hassle of foreclosure.

What is it?

Short sales occur when the bank agrees to let you sell your home for less than you owe on the mortgage. You haven’t fully fulfilled the requirements of the loan, but you are able to walk away without going through foreclosure.

To qualify for a short sale, you need to meet some requirements. There must be some sort of hardship that will prevent you from making payments as agreed. Common examples of hardships include losing your job or having your work hours and pay significantly reduced so that you aren’t able to make your mortgage payments. Other common examples of a hardship include getting a divorce, having medical issues or being relocated for work. At the start of the process, you’ll need to write a letter to your lender explaining your hardship and stating why a short sale would help you.

Another requirement of the process is having a buyer for the home. The lender has to approve the person who wants to buy your home, but it doesn’t find that buyer for you.

What are the benefits?

One of the major benefits of selling your home short is that it lets you avoid foreclosure and the credit issues that come with it. Short sales do hurt your credit, but the impact lasts for only 2 years instead of 7 years or more. That means that you can typically purchase a home again 2 years after the sale if your circumstances improve.

In many cases, the sale will clear you of any mortgage responsibility. However, it’s important to note that this isn’t always the case. The lender might expect you to pay the difference, make three months worth of payments or sign a new promissory note. Work with your lender to come up with a solution that works for both of you.

How can Duffy Realty help you?

If you are considering short selling your home in the Atlanta area, Duffy Realty of Atlanta can help. Duffy agents help you find an appropriate buyer for the home that’s ready, willing and able, with a good, clean offer. They also help you put together your hardship letter and other documents for the lender that demonstrate that the sale is the best interests of both parties. A successful sale means coming up with a price that’s right for both buyer and lender, marketing the home to appeal to buyers and having plenty of patience as all parties wait for the lender’s decision.

Image source: Flickr

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