SHORT SALES

A sale of real estate wherein the proceeds from the sale are less than the full amount owed on the property. A short sale occurs when the lender agrees that selling the property and absorbing a loss is preferable to having the borrower default on the loan and go through a long Foreclosure process. It is therefore an alternative to foreclosure.

A homeowner must prove a financial hardship such as job loss, reduction in income, death, divorce, work transfer more than 50 miles, health conditions or other factors that result in the inability to continue paying the mortgage. The financial hardship must also be long-term, meaning the homeowner will not likely recover soon after the sale has been completed.

A foreclosure is a legal process that happens when the homeowner is unable to make mortgage payments for a significant period of time. Since the lender is the primary lien holder for the mortgaged home, they have the authority to obtain and judgement against the homeowner and repossess the property (through a Sheriff’s Sale) if payments are no longer made. However, a homeowner can use the short sale process as a way to avoid a foreclosure. In some cases, the borrower may even be able to do a short sale if the lender has already started the foreclosure process, or there is a pending Sheriff’s Sale, depending on the financial situation.

A. You are ineligible to refinance or modify your mortgage. 

B. You are facing a long-term hardship. 

C. You are behind on your mortgage payments. 

D. You owe more on your home than it's worth. 

E. You haven't been able to sell your home at a price that covers what you still owe on your mortgage. 

F. You can no longer afford your home and are ready or need to leave. 

1. Eliminate your remaining mortgage debt. 

2. Avoid the negative impact of foreclosure. 

3. Receive relocation assistance in some cases — up to $3,000. 

4. Start repairing your credit sooner than if you went through a foreclosure. 

5. May be able to qualify for a  Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (up to 7 years). 

6.     There is little or no cost to you.

In many cases, the answer is yes, for a number of reasons. With a short sale, you are minimizing or eliminating the potential of a deficiency judgment entered against you and also taking less of a hit on your credit score. Recently, Fannie Mae and Freddie Mac announced new guidelines which make it possible to obtain a conventional loan within 2 years of a short sale, or up to 5 years after a foreclosure. You may also qualify for relocation assistance. Give us a call at (847) 383-5538 to see if you qualify and how we can help you.