Short Sale Information
SHORT SALE GENERAL INFORMATION
WHAT IS A SHORT SALE? A “Short Sale” or a “Short Pay” occurs when a Lender agrees to accept less than the amount owed to pay off a loan as an alternative to foreclosure. If the property is worth less than the amount owed on the loan, then even if the lender forecloses and takes back the property, they know they are going to take a loss. We can often convince a Lender that they will “do better”. If they take less than what is owed now rather than taking the property back by foreclosure and trying to sell it later.
HOW DO SELLERS BENEFIT? The seller can avoid having a “foreclosure” on their credit report. Most lenders tend to report “settled” upon successful closing of a short sale. Recent reports state that if a borrower misses 2-5 mortgage payments ,their credit score will be affected by an estimated 30-60 points. If a borrower suffers foreclosure, it can affect their score 140-200 points.
HOW LONG WILL IT TAKE? The Short Sale negociation process is a lengthy one. It may take several weeks or more likely several months to get an approval. So it’s important to be patient during this long process.
HOW DO I KNOW THIS WILL WORK? You don’t. We cannot, have not, and will not make any promises to you that will work. Once you missed a payment, the lender is in charge and can proceed to foreclosure if they want to. But we know that they do not want to and we are very good at presenting alternatives to the lender that they often want to accept rather than foreclose.
WILL I GET MONEY FROM THE SALE? No. A universal requirement of Lender in granting a Short Sale is that the borrower will not get any proceeds from the sale of the property. The lender is going to take a loss on your loan-they are not going to let you get any money.
This is a “Short Sale Package” (lender requirements) that needs to be submitted to the bank by a Real Estate Agent (the seller can’t do it by himself) at absolutely “NO COST” for the seller. The commission is paid by the bank, and it would NOT affect the seller situation at all.
