Short Sale Info
Short Sale Basics
SHORT SALE DEFINITION:
A short sale is the term used when a lender takes less than what they are owed on a particular property.
For instance, let’s say you owe $220,000 on your home, but it is only worth $200,000. If you need to sell, and you don’t have $20,000 to pay the bank at closing, you need the lender to accept a “short sale.”
The lender can then decide to approve the sale of the house and agree to receive a payoff “short” of what they are owed, hence the term, “short sale.”
What Causes the Need for a Short Sale?
Income Interruption
There are many different situations that cause individuals and families to need a short sale. In most cases, the situation is one that has interrupted your income stream, putting you, the homeowner, in a really difficult spot. The following are the most common income interruptions:
- Job Loss
- Cut in Pay
- Death in the family
- Disability
- Divorce
- Job Transfer
Short Sale’s Perfect Storm
The above scenarios, alone, are enough to trigger a need for a short sale; however we are also experiencing an unprecedented financial crisis in our country. When it comes to the housing market, King and Snohomish counties have not been hit as badly as the rest of the country. However, we have seen a significant drop in our housing prices.
Many homeowners are finding themselves buffeted by this “Perfect Short Sale Storm.” Five years ago, if you were unable to make your mortgage payment, you were able to sell your home and still come out on top because your house had appreciated in value. You had enough money to pay back your lender, pay your real estate agent and any additional costs of moving because you had equity. Unfortunately, those days are gone. Homeowners don’t have equity; they have negative equity.
Are Banks On Board?
Banks understand that income-interrupting situations occur and they have made a provision for such occurrences with their short sale programs. All banks do short sales. Anyone who tells you otherwise does not know what they are talking about. Every bank has made provisions for short sales because they are all extremely aware that, in this day and age, short sales are absolutely inevitable and necessary.
Now don’t get me wrong. Banks are not extremely efficient with their short sale processes. Because of our current economy, they are being inundated with short sales and are overwhelmed with the sheer volume of such transactions. That is why you want to work with a Real Estate Agent and a Short Sale Negotiation Team who both know how to work the system efficiently.
The Emotional Toll
The need for a short sale usually comes, not only with great financial strain, but with great emotional strain. The short sale, itself, is just one of the hardships with which the homeowners are dealing. In some ways, the short sale is the least of their worries. I have had clients who have had to deal with divorce, job loss, cutbacks, or the specter of bankruptcy AND a short sale.
So why do we even bring up the emotional toll? For two reasons:
FIRST, if you are in such a situation, you should have a team of professionals who care about you as a person and not just as a client.
SECOND, when you begin working with the right team, you will feel that burden lift at least as much as that burden pertains to your house and the short sale. Knowing you have people in your corner fighting will give you a great sense of relief.
There are people who will tell you, “Short sales are complicated.” To the untrained real estate agent, that is true. As a trained short sale agent I understand those complexities and can simplify and streamline the process and guide the transaction to success.
For more detailed information about the short sale process, how a short sale will impact you in the future, and how, as a listing agent, I can help, please feel free to contact me at 425-772-7231.
Or by using the contact form below:
Please let us know what you need. We have professionals who work with listings and buyers, short sales, and loan modifications.
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Lynette Hensley & Larry Baumgartner
425-772-7231 | 206-291-4117
L2@comebuyahouse.com
ComeBuyAHouse.com
Fax 866-355-4418