Short sale is a situation where the owner of the property does not have sufficient money to pay back the lien along with the selling expenses. In a scenario where the owner of a property or a flat does not have enough equity in his property or doesn’t possess enough liquid assets so as to sell the home he opts for short sale. The home, in short, owes a greater amount than what it is likely to get out in the market.
The term ‘short sale’ is used by the lenders who describe this as such a loan which is ‘upside down’.There can be a good lot of reasons leading to a short sale. One of the reasons for the short sale of a home can be because of the risk of a foreclosure. The other reason can be that it was bought at a higher value and good amount of equity was taken out. Discussed below are the top 6 FAQs about Short sale of Home:
What are the advantages of a short sale?
The most important point in going for a short sale is that it prevents the risk of foreclosure and also the harassment faced at the hands of the lender. One is also spared from paying off the mortgage. Therefore, by preventing the procedure of foreclosure it gives it an all new beginning. When there are late payments and the mortgage amounts are becoming unaffordable, going for a short sale method would be an intelligent proposition. After the process of short sale the mortgage gets settled.
How to qualify for short sale of home?
When you are faced with an economically dire situation that may issue from any sudden reason such as unemployment, medical reasons, divorce, bankruptcy, or death, you can go for a short sale procedure. When the market value of your home has depreciated, while the mortgage is either in or is nearing default, short sale is the best solution.Such was the rule that when there were current payments, a short sale was not considered by the lenders, but the rule no longer exists. Realizing the fact that there are other factors which contribute to a potential default, the majority of the lenders are prepared to take up into consideration the future problems.
Are there chances of being chased by the lender following a short sale procedure for deficiency?
The answer to the question is ‘no’. The short sale is negotiated by the attorneys who make sure that the lender is not after you for collecting money. The negotiation has to be done properly other than a situation where the right of collecting the deficiency is retained by the lender.
Who bears the attorney fees and the realtor’s commission?
In the procedure of a short sale, there is no escrow holding the funds for the seller. The commissions are deducted from the money that should go to the lender. Therefore lender is the only person who pays the commission to the realtors.
For how long can you stay at your home?
In this context, the procedure follows the terms of a regular sale, according to which moving out of the house is not permitted until the closing.