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Short sale Information
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What is a Short Sale? - A short sale is the process by which a homeowner can sell a house for less money than he actually owes on the mortgage(s). This is done by the buyer or investor providing proper documentation to the mortgage lenders to convince them to reduce the mortgage balance to allow the sale. The mortgage lender (or bank) actually takes a loss on the mortgage because the value of the home has fallen below the mortgage balance AND the homeowner is in a poor financial condition that will not allow him to continue to pay on time. If the bank approves the discount on the mortgage, the home can be sold for a lower price without the seller having to come up with cash to cover the shortfall, and the mortgage is satisfied and the foreclosure process stops.
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- Why would a bank or mortgage lender want to do a short sale?
- Banks do not want to own real estate, they want to lend money and collect interest. When a bank takes a property back via foreclosure, it is a long and expensive process and often results in holding the property in their inventory as a non-performing asset. Banks have a limit to the amount of non-performing assets they want to hold. Once this limit is exceeded, they have strong incentive to get rid of the properties at discount prices. For a lender, doing a short sale avoids many of the costs associated with the foreclosure process. Attorney fees, delays from borrower bankruptcy, damage to the property, costs associated with resale, property tax, insurance, etc. all must be paid by the bank during a foreclosure. In a short sale scenario, the lender is able to cut its losses by getting rid of the property faster. Again, this is particularly true in Arizona right now, not only because the real estate market is so slow, but also because the Arizona foreclosure rate is high.
- Behind on payments or about to fall behind
- Little or no equity in the property
- Personal financial hardship
How much does it cost me for you to do a short sale on my house? There is NO cost to you.
Is my house too cheap or too expensive to do a short sale? Homes in any price range can be eligible for a short sale as long as the basic criteria are met. - Behind on payments or about to fall behind
- Little or no equity in the property
- Personal financial hardship
I am behind on my mortgage payments, but not yet in foreclosure. Can I do a short sale? Yes and this is happening quite frequently in Arizona. Sometimes, these are actually the most attractive short sales for an investor and a lender because a lender can avoid ALL the costs of foreclosure with a short sale before foreclosure is filed. It is more important to have a very good "hardship" letter to explain to the lender why you are unable to make the payments.
If any of these items address pertains to you, please call me or e-mail me and I will be glad to talk with you to discuss your options.Lena Fetters
623-640-9771
lenafetters@cox.net
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