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SHORT SALE REQUIREMENTS
By Vicktor Etchart MPh.D.
Etchart Real Estate Consulting Group
Etchart@ClovisREA.com
Posted on: Monday, 02/23/2009
The American dream meant something different to everyone. Their particular situation at the time the dream was conceived molded the feasibility of the dream. Unfortunately, today's uncertain times of shifting worldwide economies, businesses closing, layoff and other glooming news for many consumers who are working hard to maintain their richer lifestyles their dream version is being redrafted mostly without their consent and to their hard awaken reality. What's more unfortunate is that so many feel like they are all alone, with nowhere to turn for help. Emotional anxiety, ego crushing reality, dreams crushed, hopes gone and uncertain future ahead.
Because of it, in my opinion, Real Estate Consultants, Realtors, agents, loan officers and mortgage brokers have the duty to teach their clients and customers seeking advice the ins and outs of short sales versus foreclosures and the best course of action to take when trouble happens. There is a definite difference between "short sale" and foreclosure with drastically different ramifications.
Let's start with the definition of a Short Sale...
The "short" in short sale actually refers to the fact that the payoff amount agreed to in the contract when the property was purchased by the owner is "shorter" thank the mortgage balance on the property. To make it simple; the amount that is owed on the property is greater than what it would be able to sell for in the open market. Banks have a list of hardships the debtor needs to qualify before a "short sale" can be considered as an option to foreclosure.
1. Health Issues
2. Rate Increase (3-5 year adjustable rate mortgage ARM expiration)
3. Predatory lending/borrowing
4. Divorce/separation
5. Job loss or transfer
6. Overextension of credit/number of mortgages
7. Two House Payments
8. Distressed sellers
9. Declining market
10. Pre-foreclosure
A short sale can be scary for those who don't understand what they are and how they work. However, a short sale can be consider a "win" for many of today's distressed homeowners. They can provide a way to avoid foreclosure and or bankruptcy. The important ramifications of each action is of pivotal understanding priority. The long term effects to the consumer ability to secure credit after the fact on a short sale vs. foreclosure.
SHORT SALE FACTS
· Negotiated settlement
· Seller's credit bruised
· No attorney fees
· Peace of mind
· Buy again in two years (in most states)
· Liens negotiated
· Possible income tax ramifications in some states.
FORECLOSRE EFFECTS
· Court settlement
· Seller's credit ruined
· Big attorney fees
· NO peace of mind
· Buy again in 10 years
· All liens exhausted
Clients of our consulting group can just call me direct. Consumers can email us to set an appointment at Rachel@ClovisREA.com 24-7. Our office will contact you back within 24 hours. Once we have accepted your case these are the following steps to follow;
1. List the property
2. Gather the needed information
3. Complete the hardship package
4. Get an offer accepted
If you are in the foreclosure loop, there are three stages to it:
1. Pre-foreclosure
2. Foreclosure
3. Post-foreclosure
It is in this initial phase that we can help so many people lessen their credit damage, get out from under a tough situation and move on to the next stage of their lives. There is a lot of fine print to comprehend. It is our job as professionals to help protect the American dream whenever and however we can by bringing out the real facts in a highly emotional phase of our clients life.
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