How To Put Your Home Up for Short Sale- By: Karim El Sheikh
You are falling behind on your mortgage and know that a foreclosure is just on the horizon. What if there was a way for you to avoid the credit pitfalls of foreclosure? What if a third party could help you salvage an otherwise unsalvageable situation?
This is where short sales come in. Short sales mean letting a third party investor pay the amount owed on your loan to the bank (as well as any fees). This basically gives them ownership of your home, as well as rights to sell later on.
What is in it for you?
You get to avoid having a foreclosure listed on your credit report, keeping your credit score up without having to suffer through as much as seven years of bad credit. A short sale is less than ideal, but it can be a perfect solution if you do not want to be at the bad end of the credit pool.
If you are behind on your mortgage payments and can prove that you are going through significant hardship, this might be an option for you.
Is it legal? Yes. Many banks have a short sale option through their loss mitigation department, because short sales can prevent a significant loss on the part of the bank. Even if the amount paid is less than what is owed on your mortgage, it is better than having an empty home on the market or a better option than dealing with the accompanying fees.
Many loss mitigators working for the banks are also paid a certain amount if they can prevent or sell off a default, which means that the loss mitigator is also interested in selling the property and often is in a position to want to sell. Buyers look for short sale homes because there is a chance that they can acquire a home for significantly less than its market value.
One drawback of short sale homes that deter both homeowners and buyers is the length of time it takes. You may be required to submit pay stubs, welfare checks, copies of other loans and forms to prove that you are currently experiencing financial hardship. This can or will include medical information, bank statements and more, so be prepared to lay open your financial situation to the bank.
If the bank accepts your situations, it will start a BPO (Brokerís Price Opinion) to start your short sale. In many cases, lower BPOs are needed to approve a short sale. Banks tend to want to go for a short sale instead of a foreclosure when the market value of your home is less than what it can get in a prospective foreclosure. Keep in mind that an appraisal or two of your home maybe needed to calculate value and possible repairs.
If this is the case, the lender and the buyer will reach an agreement to close the sale. If this happens, you give up ownership of the home, but walk away with your credit rating intact and it makes it easier for you to get back on your feet later on.
Putting your home up for short sale is one of the many options available to you if you want to figure out a way to stop a foreclosure on your home.
Article Source :
Author Resource :
Shortsales.net is your resource to find short sale properties in your area. Short sales provide homebuyers and investors with an amazing opportunity to get a home below market value.