Insider Short Sales Information
The best time to choose a short sale is when you owe more on your home than it is worth. Let's say that your home is worth 450,000 and you owe 470,000 then a short sale would be the way to go. Obviously, if you do not have to sell your home, you could wait out the market and hope for a turnaround in real estate values.
However, if you do have to sell your home you basically have three options. First, you can bring cash to the table. Say you sell your home for a $10,000 deficit, you would have to come up with that money immediately for the bank. Second, you could let the home go into foreclosure. The lender will go through the foreclosure process, force you out of your home and then auction it off to the highest bidder at a foreclosure or Trustee's auction. The third option is to pursue a short sale. You contact the lender, explain the circumstances and convince them to take less than full value of their loan.
In a case where you have a buyer for 240,000 and your loan is for 250,000, you would then explain to the bank that there aren't any buyers willing to pay a higher price. You can continue with a short sale when the lender agrees to the lower amount. Sometimes the lender will consider a short sale before you have a buyer and you can market your property and, if you find a buyer, take their offer to the lender for consideration.
One of the great things about a short sale is that they are not complicated, but there is some effort involved on behalf of you and your short sales specialist.
You have to find out what your home is worth. Your short sales specialist will do market analysis which will help you to determine what your home will sell for. You can also use the Internet to help you in this process, there are many real estate sites that you can compare listings to help you determine the value of your home. If the market is moving down keep in mind that your homes value may be moving down as well and estimated valuations may be valid for only a short time.
You also need to calculate your estimated closing costs. Items such as a title report, escrow, appraisal, attorney fees, agent commissions, unpaid property taxes etc. may add up to a substantial amount of money.
You will need to be aware of how much you have left to pay on your home, include all loans in this calculation.
Calculate your equity. In a regular case your closing costs and loan should be less than the total value your property is worth. When the opposite is true you can then pursue a short sale.
Your short sales specialist will be talking to someone in authority at your bank who is required to make these decisions. The loss mitigation department is usually who you will go through. Lenders do not have to accept your short sale, but most of the time they do because it is in their best interest. Some banks will not take a short sale unless you are behind on your monthly installments. You'll need to know where your lender stands with regard to short sales so contact them as soon as possible.
Understand where you stand with taxes. Don't low ball this figure. A large amount of taxes can occur as a result of a short sale. Talk to a professional about how much tax you will owe the I.R.S. before proceeding with a short sale. - 23221
However, if you do have to sell your home you basically have three options. First, you can bring cash to the table. Say you sell your home for a $10,000 deficit, you would have to come up with that money immediately for the bank. Second, you could let the home go into foreclosure. The lender will go through the foreclosure process, force you out of your home and then auction it off to the highest bidder at a foreclosure or Trustee's auction. The third option is to pursue a short sale. You contact the lender, explain the circumstances and convince them to take less than full value of their loan.
In a case where you have a buyer for 240,000 and your loan is for 250,000, you would then explain to the bank that there aren't any buyers willing to pay a higher price. You can continue with a short sale when the lender agrees to the lower amount. Sometimes the lender will consider a short sale before you have a buyer and you can market your property and, if you find a buyer, take their offer to the lender for consideration.
One of the great things about a short sale is that they are not complicated, but there is some effort involved on behalf of you and your short sales specialist.
You have to find out what your home is worth. Your short sales specialist will do market analysis which will help you to determine what your home will sell for. You can also use the Internet to help you in this process, there are many real estate sites that you can compare listings to help you determine the value of your home. If the market is moving down keep in mind that your homes value may be moving down as well and estimated valuations may be valid for only a short time.
You also need to calculate your estimated closing costs. Items such as a title report, escrow, appraisal, attorney fees, agent commissions, unpaid property taxes etc. may add up to a substantial amount of money.
You will need to be aware of how much you have left to pay on your home, include all loans in this calculation.
Calculate your equity. In a regular case your closing costs and loan should be less than the total value your property is worth. When the opposite is true you can then pursue a short sale.
Your short sales specialist will be talking to someone in authority at your bank who is required to make these decisions. The loss mitigation department is usually who you will go through. Lenders do not have to accept your short sale, but most of the time they do because it is in their best interest. Some banks will not take a short sale unless you are behind on your monthly installments. You'll need to know where your lender stands with regard to short sales so contact them as soon as possible.
Understand where you stand with taxes. Don't low ball this figure. A large amount of taxes can occur as a result of a short sale. Talk to a professional about how much tax you will owe the I.R.S. before proceeding with a short sale. - 23221
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