Short Sale SellersShort Sales – Thinking of Buying or Selling?
A short sale is when a homeowner owes more than the market value of the peroprety. If the home is purchased and approved via the lender, the lender ends up netting a loss in the purchase and usually will pay for real estate commissions. Although, to get a short sale completed is another task.
Each lender or bank has their own policies governing short sale procedures and criteria of what they will accept. Just because your home value falls, does not mean you are qualified for a short sale. In a short sale, true financial hardship must be proven.
If you have mortgage insurance (PMI), on the loan, the mortgage insurance company will also need to approve the sale of the short sale. The mortgage insurance company would pay the lender the difference in the loss and many times the mortgage insurance company will want the seller to take back a note for some of the loss and pay some back to the company.
If the lender is the servicer of the loan, there may be more than one entity for the short sale to be approved by. This will happen when a note has been sold several times in a short sale period or when the lender holding the note is an investor.
If you have a 1st and 2nd mortgage complicates things as it will take extra time to get the short sale approved. You will need the approval of b oth lenders to get the offer to close and get a clean title.
Not every homeowner is qualified to do a short sale so it is very important to talk with a real estate to determine your qualifications.