about Short Sales

A short sale is a real estate transaction where the home is sold for less than the balance remaining on the mortgage. This type of sale is used as an alternative to foreclosure when a homeowner cannot continue making their mortgage payments. The process involves several steps and requires the approval of the lender. Here’s an outline explaining the short sale process from start to finish, along with the benefits to both the lender and the borrower:

The ShortSale911 Process:

1. Financial Hardship Assessment

• Homeowner Assessment: The homeowner evaluates their financial situation and determines they can no longer afford their mortgage payments and that their property has a lower market value than the balance of their mortgage.

• Documentation: The homeowner provides a letter to SHORTSALE911 explaining their current financial situation and why they cannot afford their home (this is called a "hardship letter").

• NOTE: You cannot do a short sale if your property has equity (is worth more than your mortgage) and you cannot do a short sale if you profit from it in any way.

2. We Contact Your Lender

• Notification: SHORTSALE911 contacts your mortgage lender and negotiates an alternative to foreclosure, including the possibility of a short sale.

• Submission of Short Sale Request: SHORTSALE911 prepares a formal short sale proposal for the lender, including the hardship letter and any required financial documents.

3. Hiring a Real Estate Agent

• Selection of Agent: SHORTSALE911 provides a real estate agent experienced in short sales to manage the sale of your property understanding the special requirements of such a sale.

• Listing the Property: Our agent lists the property for sale at market value, which may be less than the amount owed on the mortgage. This can provide you with a competitive edge in the marketplace which can help in selling your property faster.

4. Receiving an Offer

• Receiving and Reviewing Offers: The SHORTSALE911 real estate agent secures an offer for the property and the homeowner accepts.

• Submission to Lender: SHORTSALE911 provides the offer, along with a copy of the listing agreement and the agent’s commission statement, to the lender for approval.

5. Lender’s Review

• Assessment by Lender: The lender reviews the offer and conducts a valuation of the property (often through a Broker Price Opinion or "BPO").

• Approval or Rejection: The lender decides whether to accept the offer based on the potential financial return compared to foreclosure.

6. Closing the Sale

• Approval Notification: If approved, the lender sends a short sale approval letter to SHORTSALE911 and a copy is provided to the seller.

• .Closing Process: SHORTSALE911 schedules a closing where all parties sign the necessary documents, and the buyer transfers funds. The sale is complete.

Benefits to the Lender:

• Mitigation of Losses: Lenders can often reduce their financial losses compared to the costs of foreclosure.

• Efficiency: Short sales can be less time-consuming and less costly than the foreclosure process.

• Preservation of Property Value: Properties in short sale tend to be better maintained than foreclosed properties, helping maintain property values in the community.

• Avoiding Legal and Administrative Costs: Foreclosures involve significant legal work and administrative handling, which can be mitigated through a short sale thus reducing costs to the lender.

Benefits to the Borrower:

• Less Damaging to Credit Score: A short sale can have a less detrimental impact on a borrower’s credit score compared to foreclosure.

• Relief from Debt Burden: Homeowners are relieved from the burden of a mortgage they can no longer afford without having to endure the full foreclosure process.

• Potential for Financial Recovery: Homeowners may recover from financial hardship sooner, as the impact of a short sale on credit records diminishes faster than that of a foreclosure.

• Avoidance of Public Distress: Foreclosure is a public legal proceeding, whereas a short sale can provide a more private resolution.