What is a Short Sale?

A short sale, also known as a pre-foreclosure sale, is when you sell your house for less than the remaining balance on your mortgage. If your mortgage company agrees to a short sale, you can sell your house and pay off all or some of your mortgage balance with the proceeds. Depending on your circumstances, you might have to make a financial contribution to receive a short sale.

A short sale is an alternative to foreclosure and might be an option if:

• – You are ineligible to refinance your mortgage
• – You are dealing with a long-term hardship
• – You are behind on your mortgage payments
• – You owe more on your house than it’s worth
• – You have not been able to sell your property at a price that covers what you currently owe on your mortgage
• – You can not afford your home any longer and you need or are ready to leave

What are the benefits of a Short Sale?

• – It reduces or eliminates your mortgage debt
• – It prevents the negative impact of foreclosure
• – You might qualify for up to $10k in relocation assistance in some situations
• – It starts repairing your credit sooner than if you went through a foreclosure
• – You might be able to get a mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (which can be up to 7 years)

How does a Short Sale work?

If you are eligible for a Short Sale, the process is similar to a regular real estate sales transaction. You’ll work with a real estate agent to market and sell your property.

However, your mortgage company will also be working together with you and your real estate agent every step of the way to:

• – Set the sale price based on the current market value,
• – Gather financial information and negotiate with other lien holders (ex. your second mortgage company) if applicable,
• – Review acceptable offers,
• – Agree to the terms of the sale once a buyer is in place,
• – Work with the buyer’s real estate agent and mortgage lender to finalize the sale.

In some instances, you might qualify to receive relocation assistance to go toward your moving expenses and to make the transition to a new house easier. A Short Sale can take up to 120 days, but this could be longer or shorter depending on your specific situation. If you are unable to sell your home, you might be able to transfer the ownership of your home to the owner of your mortgage (also called a Mortgage Release or Deed-in-Lieu of Foreclosure).

What Next?

Step 1

Collect your financial information; be sure to have all your basic financial and loan information on hand when you call your mortgage company. You will need to have:

• – Your mortgage statements, as well as any information on a second mortgage, if you have one;
• – Your other monthly debt payments (ex. credit card payments, car or student loans);
• – Your income details (income tax returns and paystubs).

Step 2

Explain your current situation. Be prepared to describe your current hardship and explain why you are having trouble bringing your loan up to date, and whether this is a short-term or long-term issue. Your mortgage company will need to have a clear understanding of the reasons why you are having difficulty in order to find the right solution for you.

Step 3

Contact a mortgage company and tell them that you are interested in a Short Sale and you want to see if you are eligible.

Step 4

Have one of our agents reach out to you for a free consultation.