Friday, February 15, 2013

Short Sales Fundamentals

A short sale occurs when the homeowner's mortgage balance is greater than the value of the home, and lender agrees to accept a property's market value as payoff for the mortgage loan. The lender requires the homeowner to have a documented hardship and to disclose financial information. There's a lot of paperwork and documents that need to be collected, but a short sale has minimal impact on a credit score and allows the homeowner to move on with their life. The lenders benefit because the process is quicker than a foreclosure in states that require foreclosure proceedings to occur in the courts. Florida is one of these states, and a foreclosure here can easily take three or more years to complete. Buyers who are interested in purchasing a short sale property need to be aware that the approval process can be 60 days or longer, and they may be required to pay an additional fee at closing. This happens when the lender refuses to pay for the seller's attorney and, since the seller pays no closing costs, the extra fee needs to be paid by the buyer. This should be disclosed in the MLS if it's the case. However, the fee shouldn't be exorbitant, and short sale listings typically sell at a 10 percent discount. Watch the video and don't hesitate to contact us on Facebook if you have any related questions.

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