There are many factors that go into determining if a short sale is right for you. A short sale occurs when your lender agrees to; 1) allow you to sell your home for less than what is owed and 2) accept that reduced amount as pay-off on your loan, releasing you from any further obligation.
So here are some questions to consider if you are thinking about a short sale:
Are you upside down? Do you owe more than your house is worth?
Despite the fact that there have been significant increases in home values throughout much of the country over the last year, most people who purchased a home between 2005 and mid 2007 have yet to regain the equity they thought they had acquired. To determine fair market value of your home, consult a Realtor. Do not rely on online value estimators as they can be terribly inaccurate.
Are you struggling to make your payments? If keeping your home is creating a financial hardship, and the market in your area is relatively soft, continuing to make payments on negative equity may not be a sound financial decision.
Have you been unable to obtain a loan modification? While most lenders are reluctant to reduce the principal amount that you owe, a loan modification is an option you should explore with your lender before considering a short sale.
Will you qualify? Increasingly, lenders are allowing short sales due to negative equity, but for the most part, borrowers must demonstrate a financial hardship and an inability to continue to make payments.
What are your housing plans for the future? If you are hoping to buy again, a short sale is far less damaging to your credit than a foreclosure. Many lenders will now approve a loan in as little as 1 – 2 years following a short sale.
There are some additional benefits to a short sale including the fact that the lender will generally pay all commissions and closing costs, and unlike a foreclosure, a short sale does not have as negative an impact on your credit score. Before considering whether a short sale is right for you, it is advisable to consult an attorney and your accountant.
For a confidential consultation, please don’t hesitate to give me a call. I have successfully closed many short sales throughout San Diego County and would be happy to provide references.
Despite the fact that home prices are on the rise, there are still thousands of people in San Diego County who owe more than their home is worth and are struggling to pay their mortgage. Have you fallen behind on your payments? Have you been unable to work out a loan modification? Just don’t know what to do?
I wrote a free guide book entitled, “What to Do When You Can’t Pay Your Mortgage” to help answer some of your questions and explore your options. Just go to http://cantpaymymortgagehelp.com to request your free, no-obligation copy.
For many, selling their home in a short sale has been a solution that immediately put an end to the harassing phone calls and sleepless nights. Did you know…?
Relocation Allowance: Though a relocation allowance cannot be guaranteed, it is not uncommon for the seller to be paid $2,000 – 3,000 by the lender at the close of escrow to help with the costs of moving. It all depends on who the investor is on the loan.
No Deficiency Judgment: In California it is against the law for a bank to file a deficiency judgment against you after a short sale when the loan was a first mortgage on a property from 1-4 units.
No Cost to the Seller: In a traditional equity sale, the seller usually pays the real estate commissions to the listing and buyer’s agent, along with his/her share of the closing costs. In a short sale, the bank pays all of those costs.
Here are comments from a few of my clients about their short sale experience:
“Marti was able to quickly secure a qualified buyer for our home and smoothly handled all of the negotiation with our bank. It was a huge relief to be out from under a mortgage we could no longer afford.” Megan M.
“Our situation with both a first and second mortgage and different lenders was very stressful, and I was leery of doing a short sale… I had heard so many horror stories. But Marti patiently walked us through the process and thoroughly explained every step along the way. Despite a reluctant 2nd lien holder, Marti was able to negotiate the sale and get it done.” Amber B.
“My only regret is that we waited so long to list our home for sale. I would highly recommend Marti to anyone faced with a mortgage they just can’t pay.” Lane M.
If you can’t pay your mortgage, please don’t ignore the problem. It is okay to ask for help and advice. Just remember that time is of the essence. Acting early allows you to make the decision that is best for you. Wait too long and your choices disappear. Get your free booklet today or call me at 619-846-9249 for your confidential consultation.
Inside San Diego Short Sales 