What Is a Short Sale?
A short sale is a method that a homeowner can sell their home “short” of what they owe the bank.
For example: let’s say that your home is worth $450,000 but you owe the bank $600,000, the bank has to agree to let you sell your home for $450,000 and they will take a $150,000 loss.
Reasons for Short Sale
Since the last financial crisis in the United States in 2008, some of the most common reasons that homeowners turn to short sale include job loss, the death of primary income earner in the family, or a health crisis.
For the bank to agree to short sale the homeowner must be able to prove that they are experiencing a real financial hardship and one of the best ways to do this is for the homeowner to submit a hardship letter to the bank.
Benefits Both Parties
Although most people think that bankruptcy or foreclosure are the most common ways to get out from an underwater mortgage the reality is that short sale is really the best option for both the bank and the homeowner.
Why? A short sale leaves less damage on the homeowner’s credit report and depending on their lender the homeowner may be able to purchase another home in as little as 4 years.
Short sale benefits the bank because the lender will have the ability to get the home back on the market rather than having it sit vacant while it’s going through the foreclosure process.
Considering Short Sale? Work with An Expert
At Fred Sed Realty we’ve helped many clients in Southern California get out from their underwater mortgages with a short sale.
If your mortgage is underwater and you’ve been thinking about a short sale, it’s best to work with an expert who has navigated the short sale process many times before.
Contact our Real Estate team today by calling us at (800) 921-9231 or connect with us online.