The Lotus Realty Group

In today’s market, a short sale is becoming more commonplace. A short sale is a situation where a property seller needs to sell and the sale earnings are not sufficient to pay off the existing mortgage. It is an alternative to foreclosure. They are becoming a popular exit strategy for homeowners in today’s economy.

 As a seller, it is important to consult with an accountant and attorney on the tax and legal ramifications of a short sale. You may have to be willing to undergo an asset evaluation and even be willing to walk away and let the lender have the property despite the concerns. Some sellers as well as properties are not qualified for a short sale. When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales, especially if it would make more financial sense to foreclose. In order to qualify for a short sale, you must qualify in these areas:

-          The home’s market value has dropped

-          The mortgage is in or near default status

-          The seller has fallen on hard times

Examples are:

§ Unemployment

§ Divorce

§ Medical emergency and/or sudden illness

§ Bankruptcy

§ Death

The seller has no assets

Although a seller may have escaped foreclosure, there are still the concerns of a blemished credit report and tax consequences.

As a buyer you must be careful in a short sale. Sure it seems like a great idea; the seller already accepted your offer and you have invested money into property inspections and an appraisal, but it is not always a happy ending. The mortgage company, in the end, is the deciding factor of whether or not they decide to reduce the seller’s payoff. A helpful hint for buyers; when buying a short sale property, don't expect an immediate answer and don't expect the mortgage company to respond logically.

 Here are some helpful hints when in the market for a short sale home:

-          Check the public records

-          Hire an agent with short sale experience

-          Prepare the seller for lender demands

-          Submit documentation and purchase offer to lender once the seller has accepted your offer

-          Expect commission negotiations

-          Reserve the right to conduct inspections

Here are some sample steps to a short sale:

 -          The seller signs a listing agreement with a real estate agent subject to selling as a short sale with third-party approval

-          The agent finds a buyer who makes an offer for less than the amount of the mortgage.

-          Seller accepts the buyer's purchase offer.

-          Seller's lender accepts the buyer's purchase offer.

-          Transaction closes when the buyer delivers the funds, the lender releases the lien and the seller delivers the deed.

You Have Options’ team of professionals knows the ins and outs of short sales and can give you the best possible advice. They are ready to help and direct you throughout the sometimes frustrating process that is usually known to take quite a toll when it doesn’t go as planned. You Have Options has a powerful negotiation presence with lenders and can get the lowest possible price for buyers and investors.

Although short sales have a bad rep, You Have Options can help to expedite your transaction and protect your interests. Don’t be afraid of short sales, especially when doing it the right way with the right people.

 http://homebuying.about.com/od/4closureshortsales/qt/112707_QualSS.htm

http://www.realestateabc.com/homeguide/short-sale.htm

http://homebuying.about.com/od/buyingahome/bb/BuyingShortSale.htm