The Short Sale Process - What Can I Expect?
The short sale process can be long and tedious. It begins with the homeowner in a situation where their home has a lower value than the balance on their mortgage - the short sale definition. It usually becomes dangerously close to foreclosure before the homeowner accepts the probability that the home is lost and makes an agreement with the lender to begin the short sale process.
The short sale process can be long and tedious. It begins with the homeowner in a situation where their home has a lower value than the balance on their mortgage - the short sale definition. It usually becomes dangerously close to foreclosure before the homeowner accepts the probability that the home is lost and makes an agreement with the lender to begin the short sale process.
Before the process can begin there must be an agreement between both lender and borrower. It's an agreement between two parties that involves many complexities. The most valuable aspect of the transaction for the homeowner is the avoidance of foreclosure.
The two parties first agree to the short sale, and then they must deal with all of the various and complex aspects of the bank short sale process. For example, they must decide how much of and the manner of the debt to be forgiven, the price of the home, payment of fees, and then deal with the purchase agreement. It is absolutely vital at every stage to have the assistance of a professional. The short sale process is not to be done on your own!
The homeowner will be required by the lender to complete a "hardship letter" which will document every aspect of the owner's financial trouble. The facts given will be documented by bank statements, pay stubs, and investment documents. This is how the bank will verify the events leading up to the borrower's inability to pay.
In the end, the short sale process is done for the bank to be able to keep its losses at a bare minimum. For this reason the lender must have the home appraised by real estate professionals in order to to assess the fair market value. It is all about the bank trying to recover as much of its money as possible.
If the home is sold at an acceptable price - within the acceptable time frame, the proceeds will be set forth to settle the debt as per the agreement. Remember, the bank is not going to sit around and wait forever. If the home is not sold on time, they WILL proceed with foreclosure. You can be sure that all of these issues will be drawn out clearly within the agreement drawn up by your lender.
Just because you go through the short sale process, your credit doesn't have to be destroyed. There are many aspects to a short sale and many borrowers have missed deadlines relating to financial issues directly affecting their credit rating. Their credit was damaged as a result. Some end up with damaged credit due to having other areas of financial responsibility involved in the short sale process. Damaged credit is not a definitive result of a bank short sale. This is one of the more prominent reasons that we have to acquire experts and then follow their advice.
If we successfully complete the short sale process we could very well end up with little damage. If we do it right, we could still have stable credit, no legal fees or unpaid property taxes, and no foreclosure! This would be our prize - to be in the best position humanly possible to buy another home.
The short sale process can be long and tedious. It begins with the homeowner in a situation where their home has a lower value than the balance on their mortgage - the short sale definition. It usually becomes dangerously close to foreclosure before the homeowner accepts the probability that the home is lost and makes an agreement with the lender to begin the short sale process.
Before the process can begin there must be an agreement between both lender and borrower. It's an agreement between two parties that involves many complexities. The most valuable aspect of the transaction for the homeowner is the avoidance of foreclosure.
The two parties first agree to the short sale, and then they must deal with all of the various and complex aspects of the bank short sale process. For example, they must decide how much of and the manner of the debt to be forgiven, the price of the home, payment of fees, and then deal with the purchase agreement. It is absolutely vital at every stage to have the assistance of a professional. The short sale process is not to be done on your own!
The homeowner will be required by the lender to complete a "hardship letter" which will document every aspect of the owner's financial trouble. The facts given will be documented by bank statements, pay stubs, and investment documents. This is how the bank will verify the events leading up to the borrower's inability to pay.
In the end, the short sale process is done for the bank to be able to keep its losses at a bare minimum. For this reason the lender must have the home appraised by real estate professionals in order to to assess the fair market value. It is all about the bank trying to recover as much of its money as possible.
If the home is sold at an acceptable price - within the acceptable time frame, the proceeds will be set forth to settle the debt as per the agreement. Remember, the bank is not going to sit around and wait forever. If the home is not sold on time, they WILL proceed with foreclosure. You can be sure that all of these issues will be drawn out clearly within the agreement drawn up by your lender.
Just because you go through the short sale process, your credit doesn't have to be destroyed. There are many aspects to a short sale and many borrowers have missed deadlines relating to financial issues directly affecting their credit rating. Their credit was damaged as a result. Some end up with damaged credit due to having other areas of financial responsibility involved in the short sale process. Damaged credit is not a definitive result of a bank short sale. This is one of the more prominent reasons that we have to acquire experts and then follow their advice.
If we successfully complete the short sale process we could very well end up with little damage. If we do it right, we could still have stable credit, no legal fees or unpaid property taxes, and no foreclosure! This would be our prize - to be in the best position humanly possible to buy another home.
Author:
Perry Zohanson has been helping homeowners dealing with the short sale process for years. Be sure to read his bank short sale blog for free tips on how to make the short sale process work for you.