The Secret Short Sales Letter
The best time to choose a short sale is when you owe more on your home than it is worth. Let's say that your home is worth 450,000 and you owe 470,000 then a short sale would be the way to go. Obviously, if you do not have to sell your home, you could wait out the market and hope for a turnaround in real estate values.
If this is not the case then you have 3 options to choose from. One, is to bring money to the table. Say you sell your home for a $10,000 deficit, you would have to come up with that money immediately for the bank. The second choice is to let you property go into foreclosure. Your bank will foreclose on your home and evict you from the premises. They will sell your home to highest bidder at a foreclosure or Trustee's auction. Your third choice is to pursue a short sale. A short sale involves contacting a specialist who will negotiate with the lender on your behalf. The specialist will explain your situation and ask the bank to take less than the value of your home for payment.
For example, you are have a buyer at 340,000 and your loan is for 350,000, then you would have to explain to the bank that there aren't any buyers interested in paying a higher price for your home. You can pursue a short sale only when the bank agrees to take the lesser amount for your home.In some instances banks will accept a short sale even before someone has made an offer on your house. You can then advertise your property at the lesser amount to make it easier to find a buyer.
Short sales are not necessarily complicated but do require some work on your part and your agent's part if one is involved.
Figure out the true value of your property. Your short sales specialist will do market analysis which will help you to determine what your home will sell for. You can also use the Internet to help you in this process, there are many real estate sites that you can compare listings to help you determine the value of your home. Take into consideration that the market is constantly moving and your value may only be valid for a short period of time.
Figuring out the closing costs is also important. Items such as a title report, escrow, appraisal, attorney fees, agent commissions, unpaid property taxes etc. may add up to a substantial amount of money.
You will need to be aware of how much you have left to pay on your home, include all loans in this calculation.
Calculate your equity. In a regular case your closing costs and loan should be less than the total value your property is worth. When the opposite is true you can then pursue a short sale.
Your short sales specialist will be talking to someone in authority at your bank who is required to make these decisions. The loss mitigation department is usually who you will go through. Lenders do not have to accept your short sale, but most of the time they do because it is in their best interest. Some banks will not take a short sale unless you are behind on your monthly installments. You'll need to know where your lender stands with regard to short sales so contact them as soon as possible.
Understand where you stand with taxes. Do not underestimate this! Many times there can be a substantial tax obligation after a short sale has occurred. Make sure you talk to your accountant or short sales specialist to calculate your tax before going with a short sale. - 23208
If this is not the case then you have 3 options to choose from. One, is to bring money to the table. Say you sell your home for a $10,000 deficit, you would have to come up with that money immediately for the bank. The second choice is to let you property go into foreclosure. Your bank will foreclose on your home and evict you from the premises. They will sell your home to highest bidder at a foreclosure or Trustee's auction. Your third choice is to pursue a short sale. A short sale involves contacting a specialist who will negotiate with the lender on your behalf. The specialist will explain your situation and ask the bank to take less than the value of your home for payment.
For example, you are have a buyer at 340,000 and your loan is for 350,000, then you would have to explain to the bank that there aren't any buyers interested in paying a higher price for your home. You can pursue a short sale only when the bank agrees to take the lesser amount for your home.In some instances banks will accept a short sale even before someone has made an offer on your house. You can then advertise your property at the lesser amount to make it easier to find a buyer.
Short sales are not necessarily complicated but do require some work on your part and your agent's part if one is involved.
Figure out the true value of your property. Your short sales specialist will do market analysis which will help you to determine what your home will sell for. You can also use the Internet to help you in this process, there are many real estate sites that you can compare listings to help you determine the value of your home. Take into consideration that the market is constantly moving and your value may only be valid for a short period of time.
Figuring out the closing costs is also important. Items such as a title report, escrow, appraisal, attorney fees, agent commissions, unpaid property taxes etc. may add up to a substantial amount of money.
You will need to be aware of how much you have left to pay on your home, include all loans in this calculation.
Calculate your equity. In a regular case your closing costs and loan should be less than the total value your property is worth. When the opposite is true you can then pursue a short sale.
Your short sales specialist will be talking to someone in authority at your bank who is required to make these decisions. The loss mitigation department is usually who you will go through. Lenders do not have to accept your short sale, but most of the time they do because it is in their best interest. Some banks will not take a short sale unless you are behind on your monthly installments. You'll need to know where your lender stands with regard to short sales so contact them as soon as possible.
Understand where you stand with taxes. Do not underestimate this! Many times there can be a substantial tax obligation after a short sale has occurred. Make sure you talk to your accountant or short sales specialist to calculate your tax before going with a short sale. - 23208
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