Short Sale

Posts Tagged ‘Short Sale’

A Short sale is a very good idea on paper. But, in practice, a short sale can be very difficult to do. Depending on the US state you are in and the Foreclosure law in that state, a short sale may be done by yourself, a homeowner with the help of a realtor or a buyer or a real estate investor.

What is a short sale?

A short sale or real estate short sale is the process where the homeowner is upside down in his or her mortgage and he or she has no way of paying the bank off. Please note that not every homeowner with an upside down mortgage will qualify for a short sale. Only homeowners with dire financial situations will be considered by the banks for short sale cases.

Would a bank accept a short sale proposal?

There are many reasons why a bank would or would not accept a short sale proposal. The bank will consider whether they will be able to get more money from the homeowner in Foreclosure than the amount proposed in a short sale proposal. If the bank feels that foreclosing will bring more money to them, then they will not accept a short sale proposal.

However, if the bank feels that, after reading the short sale proposal, the homeowner is so strapped for cash that foreclosing is not going to bring in any more money than the amount offered in the short sale proposal, then the bank is likely to accept the short sale proposal.

That means, whether a short sale is successful or not depends largely on whether the short sale proposal is convincing or not.

Welcome to the Short Sale Network

The Short Sale Network provides resources and tools to help homeowners who are finding it difficult to keep up with their mortgage payments. If a homeowner is consistently missing his or her mortgage payments, then the bank is likely to foreclose on the home. If the homeowner is upside down in his or her mortgage, (as in he or she owes the bank more than the home is worth or can be sold for) then a real estate Short Sale is the best solution once they can no longer afford the payment. This website aims to help all homeowners who are struggling to pay mortgage payments to keep out of Foreclosure.

Why most people need a Short Sale solution nowadays?

A real estate Short Sale is done when a homeowner owes the bank more than the home can be sold for at market value. In this hard economic time, home values are slumping in most areas. That means, homes that would usually sell for high values will now sell for much lower values, if they sell at all.

Since the home value has fallen and the mortgage balance has not, a homeowner in this situation is considered upside down in his or her mortgage. Even if the homeowner manages to find a buyer, the amount of money that he or she will get will not be enough to repay the entire mortgage balance.

The homeowner then has two choices:

1. to come up with the difference out of pocket, or
2. to ask the bank to accept the sale price

By asking the bank to accept the payout amount that is less than the mortgage balance, the homeowner is effectively proposing a Short Sale to the bank. If the bank feels that the sale price is as much as it is going to get in this economy and real estate market condition, then the bank will accept the Short Sale proposal by the homeowner. If the contract specifies it, the bank will not bill the homeowner for the difference. However, if the contract does not specify that the bank cannot later on come after the homeowner, the bank might. So, make sure that the contract specified that the bank will accept the smaller payout amount as paid in full.

We hope that the resources provided on our website will be useful and will help some, if not all, homeowners in some ways.