Foreclosures
Foreclosure vs. Short Sale which is best for you?
What is a Short Sale? – A short sale is an agreement between the bank and the home owner to allow the property to sell for less than the amount owed to the lender or lenders due to financial hardship. Negotiations for a short sale must be conducted by a licensed real estate agent. The seller must first qualify through proof of financial hardship for the bank to approve the process.
What’s the advantage to a short sale oppose to foreclosure?- Foreclosure will have a far greater impact on your credit score than a short sale. According to the credit reporting bureaus, foreclosure is the worst possible report. Short sales are said to effect your credit scores much less than a foreclosure and expected to come off your credit report within two years. Furthermore, foreclosure will negatively mark your credit score for 7 years . In an approved short sale, the lender that initiates the foreclosure proceedings will not seek a deficiency judgement. For questions regarding the 2nd mortgage holders position, please contact Jose Pastor at Jose@GreenArborRealty.com for a more detailed answer to your specific situation.
Deficiency Judgment – A Court order against the homeowner to pay the lender the difference between what the homeoner owes and what the lender is able to sell the house for.
How does my Realtor get paid? – The Realtor’s commissions are paid by the lender approving the short sale. The seller has absolutely no out of pocket expense for the Realtor’s commissions. Beware of anyone or any company that attempts to charge a fee to short sale your property.
Does the homeowner approve the offer or does the bank have a say in it?- You, the seller will initially approve any offers received. However, there is no binding contract until the lender approves the offer as well as the 2nd mortgage holder if one is involved. When more than one lender is involved, the short sale becomes more complicated. Here is where an experienced short sale Realtor will shine!
Can I use my regular Realtor to do a Short Sale? - This is not advisable unless your realtor has experiense closing short sale transactions. Most general residential real estate agents don’t have this experience. An agent new to short sales can hurt your chances of an approved offer and the probability of foreclosure increases. You can’t afford to be a “practice run” for an inexperienced agent!
How Do I qualify for a Short Sale? - For a short sale qualification, please contact Jose Pastor, your Certified Foreclosure Consultant at Jose@GreenArborRealty.com or call 503-805-3770