Do You Know What a Short Sale Is?
Simply put, a short sale is when a seller has a hardship (e.g. death, divorce, job loss), needs to sell, and owes more on the mortgage than the home is worth. It is a complicated process for both sellers and buyers and is anything but short when it comes to time frames.
Sellers first should speak to their lender’s short sales specialist (which could entail many phone calls) and submit a financial package. Not all lenders will accept short sales – it may be financially better for them to foreclose. There could be tax consequences if the IRS considers the amount forgiven as income or the lender may still want the difference owed even after the sale. Sellers should speak with a CPA and lawyer.
Buyers need lots of patience! Even if the Seller accepts your offer, it still has to be approved by the lender. This could take months. (It is more complicated with multiple loans on the house.) The National Association of Realtors® report that on average, short sales sell at a 17% discount. A short sale can be a good deal but understand the obstacles and bring plenty of patience.
Keeping my buyers and sellers educated is part of my job. Give me a call if you would like to work with a Realtor® who will always keep you informed, 603-526-4116.
