What is a short sale?
A little-known alternative, once more commonly used in the real estate downturn of the early '90s, is the "short sale," which Works like this: A homeowner falls behind on his or her mortgage payments, usually due to a job loss, rising debt payments, or both. Facing a situation in which the home value has fallen and cannot be sold for the amount of the mortgage owed, Prudential One Realty works out a deal with the lender to sell the home for whatever the market will bear. If the amount of the sale is for less than the amount owed on the mortgage, the lender gets the proceeds and discharges the remaining debt.
Also known as a real estate short pay-off or a pre-foreclosure workout, a short sale is an agreement with a lender to accept less than the amount owed by a borrower via a sale of the property to a third party.
What are the advantages of short sale vs. foreclosure?
While in both cases, short sale and foreclosure, the delinquent mortgage will negatively affect their credit rating, at least short sellers avoid having a "debt discharged due to foreclosure" on their credit reports. Mortgage and credit experts say that, after bankruptcy, having a foreclosure on your credit report is the worst result and will reduce your credit score by over 250 points. You could also have to wait up to several years to qualify for a mortgage at a reasonable rate.
Short sales show up on a credit report as a "pre-foreclosure in redemption" status and can result in a credit score reduction of 100 points or less. After the sale, the mortgage may show up as "discharged." People who successfully complete a short sale may also qualify for a mortgage at a reasonable interest rate in as little as 18 months. So, if buying a home is a future goal, then a short sale is the better option for many families.
What is the criteria that I must meet in order to be considered for a hardship situation?
Borrower will usually to prove a ?hardship? and therefore unable to continue making payments on the mortgage. A hardship situation is one that is the result of some extenuating circumstance that forces the borrower into a position where they can no longer afford their mortgage payments. While every situation is different, some frequent examples of hardship include:
? Decrease in the value of the home
? Unemployment or loss of primary income source
? Inability to work due to health crisis
? Mounting medical expenses
? Employment relocation
? Failure of business
? Bankruptcy
We have highly trained Certified Distressed Property Experts available for your consultation. A CDPE has undergone extra training focused on Short sale and Foreclosure situation, and what is the best srtategy for the home owner. They actively attend training geared towrds thoer specialty, Short Sales! Click Here to contact a CDPE in your area
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