The economy is beginning to show signs of a slow recovery and less shock from external forces. That said, we still have a ways to go before we can see a “full recovery” in the housing market.
This is due in large part, to the number of foreclosures being filed. Just last year, there were over a million homes listed as foreclosure according to RealtyTrac, which publishes the largest database of foreclosure, auction and bank-owned homes in the country.
And here’s where things get interesting. According to the National Association of REALTORS®, of those million foreclosures, only 30 percent were listed! That’s more than 700,000 homeowners who did not know their options!
If you’re in an unfortunate financial position and are facing foreclosure, please know that a short sale is an option. A short sale happens when the lender is shorted on a mortgage, meaning the lender accepts less than the total amount that is due. Here are some methods for determining if you qualify as a short sale candidate:
- The home’s market value has dropped. Based on comparable market analysis, you must be able to prove that your home is worth less than the unpaid balance to the lender.
- The mortgage is nearing or is currently in a default situation. Many lenders are willing to work with homeowners before the home is defaulted on in order to head off future problems.
- The seller has fallen on hard times. If a seller can prove that they are unable to pay their mortgage payment on time due to a significant loss in income or other financial hardship, the lender is willing to allow a short sale. Extensive documentation is usually needed to prove the hardship, and will be denied if it involves bad purchasing decisions, buying another home, pregnancy or moving into an apartment.
- The seller has no assets. If the seller can prove that they have no assets, including a savings account, stock, other real estate investments or other accounts to their name, the lender will explore a short sale option. They will likely look at the seller’s tax returns and financial statements to verify that that they do not have any assets that could be used to pay down the difference that they owe on their mortgage.
Foreclosure isn’t your only option. While short sales may take longer in some cases and you still experience certain repercussions, you avoid significant credit and costly tax implications that occur when you foreclosure on a home.
This is often a difficult and highly stressful situation for homeowners. If you need further information and are ready to look at your options, I’m prepared to help. Please give me a call to find out if you qualify for a short sale – 480-773-5195 or email firstname.lastname@example.org.