Is a Short Sale Right For Me?
Buying a short sale can be a good value for a buyer. And it can be the right solution for a seller who is upside down in their mortgage. At this time in 2015, with home prices having risen quite a bit since 2008, and almost back to 2006 levels in Charlotte, short sales are thankfully fewer and fewer. And there are alternative ways to sell a home even if it looks like a short sale is the only way to sell. Ask an experienced Realtor for details. Basically, a short sale is where the seller owes more money in the mortgage than he can sell his house for, and requests the bank to release their lien “short” of getting all the funds to payoff the mortgage. Normally, that shortfall amount is offset in an unsecured loan that the seller is obligated to pay back to the bank. Sometimes the shortfall is totally forgiven. Every short sle is different as every seller’s situation and every lienholder’s policies are different.
Sellers have to qualify for a short sale and have to show need. There usually has to be a qualifying reason someone is requesting this and not just because the mortgage is higher than the market value of the home. Examples of qualifying reasons are illness and out of work, loss of job, job transfer to keep a job and so on. Only the lienholder, or bank, can ultimately make that determination. But an experienced Realtor can guide a seller through the process of qualifying and requesting a short sale as well as handle the transaction from listing to closing.
Use a Qualified Agent – SFR or CDPE
It’s critical to use an experienced and qualified Realtor when listing or buying a short sale property. Ask if the Realtor has their SFR or CDPE designation. These Realtors are certified and experienced in selling foreclosure properties and short sales, both which are more complicated all the way through from contract to closing.
Make sure to get a Broker Price Opinion of value from an experienced Realtor at the very beginning. Alternate solutions to a short sale include borrowing from a 401(k), borrowing money from a relative, selling an item of value, negotiating the terms of the listing agreement, and sometimes just modifying the loan and staying in the house is the best solution of all.