Are you searching for ways to prevent foreclosure? Then it’s high time for you to look into another real estate option – short sale. A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan. A borrower who cannot pay the mortgage loan on their property may opt for a short sale. This is where the lender decides to sell the property rather than pressing the borrower. This option is definitely better than facing foreclosure which can cost that much to the lender and that may signficantly lower down the borrower’s credit score. Yet, this does not mean the borrower is free from paying the remaining balance. Foreclosure can scar a homeowner’s credit record for years and a short sale, though it may involve some extra work, can help the lender from losing too much and the borrower from having a bad credit record.
In the short sale process, a real estate agent works with the lender and begins by evaluating the property to determine its value in comparison with the remaining amount owed by the borrower. On the other hand, the homeowner must also work with a real estate agent or a lawyer. The borrower should be able to provide some proof and documentation detailing the reasons for the short sale. In turn, s/he has to provide some proof like bank statements, pay check stubs, and personal letters of explanation to verify his/her inability to pay the loan.
This is the first step of short sale – appraisal in current market value of North Ogden Real Estate done by an experienced real estate agent. The next thingto do is to contact your lending company. The homeowner and the lender has to discuss the the reasons for the homeowner’s delinquent status. Not all lenders may be willing to forgive a debt but there will still be instance where they will have to talk with the real estate agent to discuss thr proeprty in question. The homeowner is asked to write a preliminary net sheet and a hardship letter o authorize the short sale process. The preliminary net sheet contains all costs associated with the sale plus the amount of the original loan, the price at which the house is expected to sell, and any other fees charged by the agent or the lawyers while the hardship letter contains the reason the homeowner is unable to continue making his payments like loss of job, hospitalization, or even death.
A purchase agreement with the sale price will be sent to the lender if the property has a buyer. This is where the lender has to make the decision whether the remaining debt is forgiven or not, and if they will report this short sale process to a credit rating agency. A short sale can still damage a credit report for several years unlike that of Richmond VA Foreclosures which can take seven years. Even if all the steps are followed, a short sale may still show up on your credit report for several years.
