What is the Meaning of a Lender Short Sale?
If you have a home property in foreclosure, a lender short sale may offer a solution. A lender can accept terms from a new buyer and help you, the current distressed homeowner, to get out from under the mortgage you cannot afford. The best short sale deals include terms that everyone can live with. Before agreeing to a short sale, seek the advice of a real estate attorney.
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Short Sale Defined
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A short sale means that the lender accepts a price from the seller for less than you owe on your mortgage. The principal of your mortgage may be more or less than the actual value of the property. In a short sale, the lender accepts less than the principal. A new buyer might pay cash for the property or get her own financing to pay off your lender under the terms of the short sale.
Seller Requirements
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A short sale requires some effort on your part as the seller. You have to take steps to find a buyer for the property, such as by having a real estate agent list the property for sale. To satisfy the lender's requirements for a short sale, you also have to prepare your own financial documentation. For example, you show that you have a purchase agreement from a buyer and a listed property, your hardship letter and recent tax returns and proof of wages and assets. You must make it easy for the lender to agree that the sale will be in its best interest.
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Real Estate Representation
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A real estate attorney provides you legal advice before you arrange a short sale to get out from under your mortgage. You also benefit from having a licensed real estate agent. This person lists the home and helps you find a buyer. He works out the terms of the purchase contract just like in any other real estate transaction. In a short sale though, the buyers must be prepared to wait a few months for the lender to approve the transaction. You must work with the buyer to answer all of the questions about the property. A real estate agent can handle this for you, discussing the property details, including property conditions requiring improvement, replacement or repair.
Buyers
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Buying a short sale represents a risk for buyers. First, you have to wait for a seller to accept your offer. Then you can wait months for the lender to approve the deal. If you buy without the assistance of a real estate attorney, you can get stuck with unfavorable conditions after the sale, such as unpaid liens on the property. Use a real estate attorney to establish a clear title to the property and ensure unpaid property taxes and other liens will not become your responsibility after the sale. Also, get advice about ways the seller might back out of the sale.
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References
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