Short Sale Questions and Answers
Define Short Sale.
A short sale is a type of real estate sale in which the sale proceeds are less than the outstanding loans on the property. It helps the borrower absolve of the loan which has become too difficult to pay; the lender prefers to sell the property at moderate loss over pursuing the borrower who is himself in the red.
Why is it necessary to hire a real estate agent?
Agents experienced in short sales help homeowners tremendously in this tricky process. They persuade the bank or lender to agree to a price lower than the competitive value so that the difference between the outstanding loan and sale proceeds become little and as a result the homeowner gets out of the obligation to pay the remaining balance. An efficient agent endeavors to make your short sale successful and handle all the deals with the bank and clients in a professional manner.
What qualifies me to use the option of short sale?
Financial hardship is the central point which needs to be proven if you want to use this option. Major factors that are considered to contribute in a person’s hardship include employment loss, increased utility bills, sudden death of a resource generator family member, relocation, etc.
Will the bank pursue me for remaining balance?
No, in most cases they will not. Generally the agents put their efforts to bring the balance to a very scanty amount. As a result of a successful short sale, you will be entitled to a complete release from the loan.
Why do lenders accept the short sales?
Well, the only alternative to short sale is foreclosure which consumes not only a big chunk of money ($58,000 on average) but also a long period of time. The legal process, bank dealings and consequent sale may bless the borrowers to keep on residing in the home. This may also deteriorate the condition of the house and cause the lender to spend even extra money on renovating the house. Owing to these consequences, the banks or lenders agree to suffer less loss on the property and accept the request of the borrower for the short sale.
What are the effects of short sale on a credit rate and credit history?
A short sale has comparatively less effects on the borrower’s credit rate and credit history. The maximum loss in credit rate he has to suffer is about fifty points which surges to over 300 in foreclosure. Similarly, a short sale is not mentioned in the credit history of a borrower; “Paid in full” or “Settled with negotiation” are the phrases that come in the credit history.
What if my financial hardship has come to an end and I can pay the loan? Do I still have to sell the home?
If you can convince your lender that you are no more in the red and can pay the outstanding loan as per agreement, you can still secure your house. To do so, write an application letter to your lender stating that the problem that cause payment disruption proved temporary. Also mention that you are now in a stable condition to continue the mortgage payment and show it by paying the delinquent amount.
For more information on the short sale process or to receive a free evaluation of where your home stands in today’s market, fill out the form below.
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Are you looking for a Providence short sale Realtor? Look no further! Our stop Rhode Island foreclosure specialists provide FREE short sale expert services to Providence RI homeowners in hardship. Call today for short sale information on the Providence short sale process and to see if you qualify for a short sale! Need a Providence RI Distressed Property Expert in short sales to offer free Chase short sale services? Our Providence area Distressed Property Expert real estate agents are here to help, and are Certified or training in the Rhode Island Home Affordable Foreclosure Alternatives program.
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Our organization does not directly offer short sale or foreclosure rescue services in the state of Rhode Island.
