What is a short sale? A short sale occurs when the amount of the outstanding loans is greater than the amount for which the home could sell. This can be due to many factors, but frequently is a result of a rapidly declining housing market.
Short sales could be a way for homeowners to preclude foreclosure and pay off their loan with the lender by settling.
How do I proceed with a short sale?
First, get an idea of the true market value of your home. A knowledgeable REALTOR®, like those at Atlantic Grove Realty, will be able to give you a good idea of what your property would likely sell for based on a market analysis. Be cautious of websites where a computer estimates your property’s market value since they may not have complete information or know important things like neighborhood trends and current listings.
Next, find out your closing costs. My work in this area has taught me to consider fees like title report, appraisal, escrow, property taxes, and agent commissions to tally your final costs at the closing table.
Finally, contact your lender and make them aware of the situation. They may even have a special team that deals with short sales. Ask about their exact steps. Some lenders will be more able to work with you than others. They may be able to reduce the amount owed or make other arrangements. Your lender will have to give approval for the final sale.