The short sale process can be quite stressful on the homeowner. They are in the unfortunate position where their home is worth less than the mortgage - the short sale definition. Most homeowners allow themselves to approach dangerously close to foreclosure before admitting that the short sale process is something they'll have to deal with.
Before the process can begin there must be an agreement between both lender and borrower. It's an agreement between two parties that involves many complexities. The most valuable aspect of the transaction for the homeowner is the avoidance of foreclosure.
The two parties agree to the short sale, and then to all of its minute detail. They must agree to many things such as unpaid property taxes, the selling price of the home, the purchase agreement, the payment of the various legal fees, and the amount of the debt to be forgiven. It is extremely important to have professional assistance. Do NOT attempt the short sale process with professional help.
The lender will require the homeowner to complete the "hardship letter" in order to explain how they ended up in such financial distress. The borrower will be required to document statements in the hardship letter through pay stubs, investment documents, and bank statements. This will provide a historical time line leading up to the homeowner's inability to pay.
It is at the next stage that the lender appraises the value of the home through real estate professionals. The whole short sale process is used primarily by the lenders to undertake minimal losses. For this reason, it is vital that the lender appraise the home properly - so that the bank can get back as much of its money as possible.
If the home is sold in accordance with the agreement - then the money will be used to settle the debt. The bank is not obligated to wait any longer than they agreed to wait in the contract. They can legally proceed with foreclosure if it is not sold by the date agreed to in the contract. These issues will be clearly stated in the agreement.
The borrower's credit rating doesn't have to be damaged by the short sale process. A short sale involves many complex issues and many people have missed important dates relating directly to their credit rating. Their credit was left in shambles as a result. Some allow their credit to be damaged due to having other finance areas deeply ingrained in the short sale process. Damaged credit is NOT a foregone conclusion here - this is the important point. It is for this main reason that following the advice of our experts is critical.
If we successfully complete the short sale process we could very well end up with little damage. If we do it right, we could still have stable credit, no legal fees or unpaid property taxes, and no foreclosure! This would be our prize - to be in the best position humanly possible to buy another home.
Before the process can begin there must be an agreement between both lender and borrower. It's an agreement between two parties that involves many complexities. The most valuable aspect of the transaction for the homeowner is the avoidance of foreclosure.
The two parties agree to the short sale, and then to all of its minute detail. They must agree to many things such as unpaid property taxes, the selling price of the home, the purchase agreement, the payment of the various legal fees, and the amount of the debt to be forgiven. It is extremely important to have professional assistance. Do NOT attempt the short sale process with professional help.
The lender will require the homeowner to complete the "hardship letter" in order to explain how they ended up in such financial distress. The borrower will be required to document statements in the hardship letter through pay stubs, investment documents, and bank statements. This will provide a historical time line leading up to the homeowner's inability to pay.
It is at the next stage that the lender appraises the value of the home through real estate professionals. The whole short sale process is used primarily by the lenders to undertake minimal losses. For this reason, it is vital that the lender appraise the home properly - so that the bank can get back as much of its money as possible.
If the home is sold in accordance with the agreement - then the money will be used to settle the debt. The bank is not obligated to wait any longer than they agreed to wait in the contract. They can legally proceed with foreclosure if it is not sold by the date agreed to in the contract. These issues will be clearly stated in the agreement.
The borrower's credit rating doesn't have to be damaged by the short sale process. A short sale involves many complex issues and many people have missed important dates relating directly to their credit rating. Their credit was left in shambles as a result. Some allow their credit to be damaged due to having other finance areas deeply ingrained in the short sale process. Damaged credit is NOT a foregone conclusion here - this is the important point. It is for this main reason that following the advice of our experts is critical.
If we successfully complete the short sale process we could very well end up with little damage. If we do it right, we could still have stable credit, no legal fees or unpaid property taxes, and no foreclosure! This would be our prize - to be in the best position humanly possible to buy another home.
About the Author:
Perry Zohanson has been helping homeowners facing the short sale process for a long time now. Be sure to check out his bank short sale blog for free tips on how to make the short sale process work for you.
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