Most people have heard of a short sale, but don’t really know what it is.
A short sale means the net proceeds from the sale of a home are not enough to cover the seller’s mortgage and closing costs, such as property taxes and Realtors® commissions. In a short sale, these fees are paid for by the lender, not the homeowner, and the seller is unwilling or unable to pay the difference.
A short sale can be an excellent solution for the homeowner who needs to sell and who owes more on his home than it is worth. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, lenders realize this is an alternative to foreclosure and a better solution, not only for the homeowner, but the lender, as well.
Recent changes in corporate policy and government programs, such as Home Affordability Foreclosure Alternative, also known as HAFA, also have improved the short sale process and the ability to get a short sale approved.
But to be technical, here is a more official definition:
A homeowner is short when the amount owed on his mortgage plus the additional closing costs are higher than the current market value.
A short sale occurs when a negotiation is entered into with the homeowner’s mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then sold short of the total value of the mortgage.
If you are a homeowner experiencing any of the following, you may qualify for a short sale transaction.
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Loss of employment, wage reduction
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Medical illness
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Unable to afford new increase in mortgage amount
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Unable to refinance due to little or no equity in the home
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Need to relocate due to work or other situations
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Divorce or death of a spouse
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Unable to continue making your mortgage payment
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Need to sell your home but are upside down
Today, short sales are becoming increasingly more common as homeowners become aware they have an alternative to foreclosure. Furthermore, lenders would rather negotiate a short sale than foreclose on the home.
The short sale transaction can be a much more beneficial alternative to foreclosure or even bankruptcy.
For more information on short sales and foreclosures, visit www.ArizonaShortSaleToday.com, or contact me today for a free confidential consultation.
Call my cell at (602) 571-6799, or send an e-mail to Lorraine@ArizonaShortSaleToday.com.