What’s right for you? If you are having trouble making your mortgage payment and you are ready to give the home back to the bank, you might have thought about a foreclosure or short sale.
What’s a short sale? It’s when the bank or investor accepts less money for the payoff than what is actually owed. If you owe $300,000 on your home, but it can only sell for $250,000, then you might ask the bank to take less money so that you can sell. This is better than a foreclosure, but will not keep your credit spotless.
But, you can’t just assume the bank will be willing to take less. Most banks require you to be behind in your payments due to a job loss, relocation or other significant income loss. The bank has to see the short sale of your home to be the lesser of two evils for them. It all comes down to how the bank can lose the least amount of money.
If you decide to go forth with a short sale, you’ll need to contact a REALTOR that is experienced with such sales. That agent will have to contact all your lenders. The lender that has the 1st loan. The lender that has the 2nd loan. Even the lender that helped you build a pool or other home equity addition. The agent will have to sell the bank on allowing a short sale to take place. Many times this requires talking with several bank departments. Starting with the Loss Mitigation department and moving up the ladder. The process can take several months. For most agents, this is unusual, doing so much work before the home is even on the market and the entire time you the seller are in a race with foreclosure. Who’ll win, the efficient agent selling your home or the foreclosure process?
So, if you are behind in payments, it’s no time to experiment with your nephew that just got his real estate license. You’ll first have an agent come into your home and do a market analysis. Then the agent will do an audit of your present condition credit wise. That agent will devise a plan to get your home sold before it’s sold on the courthouse steps.
If you’re in this situation, first ask your agent if they can do the market analysis and credit audit right away. If they can’t or don’t know what you’re talking about, call me.
I’ll do the market analysis and credit audit free of charge, whether you decide to use me as your agent or not. It’s even possible that you don’t need to sell short and that you can sell your home and walk away with a check in hand.