What is a Short Sale?
A Short Sale occurs when a fnancially insolvent homeowner who is facing foreclosure sells his home for less than the value of his loan. The lender accepts the sale as payment in full for the loan. This helps the homeowner to avoid foreclosure and the tremendous hit to their credit rating. Short sales take time, attention to detail and an understanding of property owner and lender options.
Your Short Sale & Foreclosure Specialist will begin asking you for documents, records, expenses and information necessary to complete the lender proposal. The more information and communication, the better opportunity for results.
8 Steps to a Short Sale: (1) Gather Information, (2) Open Communication, (3) Develop the Proposal, (4) List the Home, (5) Obtain an Offer, (6) Submit a Proposal, (7) Negotiate the Deal, (8) Close the Deal.
What is Foreclosure?
A legal process in which a lender takes the title or forces the sale of a property as a result of the borrower’s failure to comply with ther terms and conditions of the mortgage.
3 Phases of Foreclosure: Phase 1: Preforclosure (Private) Phase 2: Public Auction (Public) Phase 3: Real Estate Owned or REO (Private)
What is the Foreclosure Timeline?
· Preforclosure begins the day that you are late with your mortgage payment and late charges begin accruing.
· Lender sends notice of default (around 45 days)
· Notice of Intent to Foreclose Publicized (around 90 days)
· Auction (around 150+ days)/Real Estate Owned
· Redemption Period: from the time the property sold at auction until the clerk files the paperwork.
Foreclosures cost the lender time and Money. Between legal fees, possible eviction costs, taxes, insurance, maintenance, HOA fees and selling costs, a foreclosure can cost a lender 40K or over. Lenders do NOT want to OWN.
Other alternatives are available and a Short Sale & Foreclosure Specialist can guide you through them. During your marketing presentation, ask your Specialist for details. Your Short Sale & Foreclosure Specialist will need to determine if the seller/homeonwer is a quailfied short sale canidate. Four key criteria must be met. The are: (1) Demonstrates Hardship, (2) Financially Insolvent, (3) Market Pricing, (4) Cooperative.