Many thousands of home owners across the nation are considering the possibility of selling their home by means of a short sale. If you are one of them, here are four of the most common questions asked by sellers
What exactly is a short sale?
A short sale is basically a negotiation with the your bank to sell your home for less than what you owe.
This type of sale occurs when an owner falls behind in making the monthly mortgage payments and is risking foreclosure. In nearly all cases, the value of the property is less than what is owed on the loan, or perhaps there isn’t enough equity to cover realtor fees and closing costs. Therefore, the home cannot be sold under normal sales conditions because lenders are unwilling to loan more money on a property than what it is worth to your potential buyers. Even in cases where there is enough value to cover these costs, you may consider selling through a short sale in order to speed up the sale by lowering the price.
What are the benefits of selling my home short?
Due to the economic crunch, having good credit has become very important. Even though your credit has probably already taken quite a hit, a short sale is easier to fix on your credit then a full out foreclosure.
If you owe more than your home is worth, selling short also gets you out an upside down home. This is an appealing benefit to many home owners that find themselves owing thousands more than what their home is currently valued at.
Are there any disadvantages for me if I do a short sale of my house?
Yes, there are a few other things to consider. You will be doing a lot of paper work, both in accepting offers and proving to the bank that you qualify for the short sale. (We will talk more about that later.) Also, it can be a little frustrating that your bank is calling all of the shots as to whether or not an offer is accepted. You see, it isn’t up to you anymore, it’s up to the bank.
Short sales are also notorious for taking a long time to close, so don’t count on a quick process.
What do I need to do to get started with the short sale?
The most important thing is to list your house with a realtor that has lots of experience selling short sales. This is no time to hire a family member that has never handled one before. You are looking for a realtor that knows what the are doing because it will make things go much smoother for everyone involved.
You’ll also want to put together a letter for your lender explaining your change in circumstances and why you are no longer able to make your mortgage payments. This is called a hardship letter and most banks require one to get the process started. You’ll want to talk to your agent about this.
Your bank will also no doubt ask for your tax returns for the past two years and pay stubs to prove how much money you are making.
After these steps your realtor will pretty much handle everything else, you’ll just need to sign whatever papers they tell you to!
In conclusion, a
http://utahrealestateagents.org/”>short sale can be a real help to get you out of a tight spot and closer to getting your life back together. It’s usually a wise choice if you’re facing losing your home.
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