San Clemente Short Sale Realtors Specializing Short Sale
A short sale is when the owner agrees to accept less than what he/she still owes on his/her house. A short sale allows the homeowner to avoid foreclosure while keeping ownership of the home. However, the transaction must go through the courts and a third party mediator. This could take months, even years, depending on how long it takes to complete the paperwork San Clemente Short Sale Realtors Specializing Short Sale Real Estate can help you with your short sale.
In contrast, foreclosure occurs when a bank files legal documents against a homeowner, forcing him/her to give up the property. The bank usually buys the property for pennies on the dollar and sells it again at auction for much more. The proceeds from the sale are used to pay off the loan balance.
A homeowner who has gone through a short sale may, with certain restrictions, be eligible to purchase another home immediately. Depending on the circumstances, homeowners who experience foreclosure can expect to wait two to seven years to purchase another home. A foreclosure is kept on a person’s credit report for seven years.
While a foreclosure essentially lets you walk away from your home albeit with grave consequences for your financial future, such as having to declare bankruptcy and destroying your credit completing a short sale is labor-intensive. However, the payoff for the extra work involved in a short sale may be worth it.
Less disruptive alternatives to a short sale include loan modification and utilizing private mortgage insurance.
Your short sale Realtor® negotiates with the lending firm currently holding the property’s mortgage. The goal is to determine how much money the lender is willing to lose on the short sale. Unlike a traditional sale, the negotiation starts before the house is listed. A short sales real estate agent must get the lender’s O.K. to go ahead with a short sale.
Lenders want to recover as much money as they can. If the lender stands to make more money between the private mortgage insurance payout and selling the property themselves, a seller may have difficulty gaining lender approval.
This is where the short sales Realtor® can flex their skills, having worked with lenders on previous short sales. As a result, they know what approach to use to hopefully persuade the lender that selling the property short would be in their best interest.
During the initial negotiations, the short sale real estate agent will ask you to put together a short sale package that explains why you’re seeking a short sale. In addition, it will include a hardship letter and your financial records for the past two years (if not more). Since you will be sharing your financial records — including any overdue and collection notices — you must hire an agent you can trust.
Short Sale Alternatives
Before resigning yourself to a short sale, talk to your lender about the possibility of a revised payment plan or loan modification. One of these options might allow you to stay in your home and get back on your feet.
Another possible option for staying in your home arises if you have private mortgage insurance (PMI) . Many homeowners who purchased homes with less than 20% down were required to purchase PMI with their homes. If the PMI company thinks you have a chance at recovering from your current financial situation, it may advance funds to your lender to bring your payments up to date. Eventually, you’ll have to repay the advance.
Convincing the Lender
Before beginning the process, the struggling homeowner should consider how likely it is that the lender will want to work with them on a short sale by understanding the lender’s perspective. Since the lender is not required to do a short sale, it will be allowed at the lender’s discretion.
The source of the financial trouble should be new, such as a health problem, the loss of a job, or a divorce, rather than something that was not disclosed when the homebuyer originally applied for the loan. The lender won’t be sympathetic to a dishonest borrower. However, if you feel you were a victim of predatory lending practices, you may be able to talk the lender into a short sale even if you have not had any major financial catastrophes since purchasing the home.
To put yourself in a more convincing position to complete a short sale, stop purchasing non-necessities. You don’t want to look irresponsible to the lender when it reviews your proposal.
Be aware of other circumstances that may prevent the approval of a short sale. If you are not in default on your mortgage payments yet, the lender probably won’t be willing to work with you. If the lender thinks it can get more money from foreclosing on your home than from allowing a short sale, it may not allow one. If someone cosigned the mortgage, the lender may hold that person responsible for payment rather than doing a short sale.
If you think your situation is ripe for a short sale, talk to a decision-maker at the bank about the possibility of engaging in this type of transaction. Don’t just talk to a customer service representative. To work your way up the phone ladder, immediately ask to speak with the lender’s loss mitigation department. If you don’t like what the first decision-maker says, try talking to another one on another day and see if you get a different answer. If the lender is willing to consider a short sale, you’re ready to move forward with creating the short-sale proposal and finding a buyer.
What is your short sale experience!
You need to confirm that the short-sale realtor has done short sales. Knowledgeable real estate agents in short sales should be able to demonstrate their experience. Ask to see how many short sales transactions they’ve closed. If you interview agents that haven’t had many short sales recently, ask about their short sale history from 2008 to the mid-2010s. Since short sale regulation has changed since 2008.
If you are searching for San Clemente Short Sale Realtors Specializing Short Sale Real Estate call Hadi; Hadi specializes in short sale residences, condominiums, and investment properties throughout Orange, Los Angeles, Riverside, and San Diego County with emphasis on Tustin, Irvine, Huntington Beach, Newport Beach, Newport Coast, and Costa Mesa.
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