Short Sale Your Home

by Kendra Chui on January 29, 2012

Do you owe more on your mortgage than your house is worth? You could ask your bank about offering short sale your house . Current California legislation makes clear that once the bank agrees to a short sale, it must accept the sale price as full payment of the mortgage. For instance, if the bank approves the sale, then if you owe $300,000 but sell your house for $200,000, the bank must forgive the outstanding balance of $100,000.

Your bank might allow you to offer short sale your house if you’re experiencing significant financial difficulty (such as unemployment or divorce) and if other kinds of mortgage restructuring wouldn’t work.

Both you and the bank get something out of the deal if you offer short sale your house . You are freed from your mortgage debt in return for the house’s sale price. You stop foreclosure and the ensuing breakages to your credit. The bank gets partial payment of its loan with no need to go thru a long and costly foreclosure proceeding.

If you’re offering short sale your home , you’ve first got to get the contract of people who have claims against the house. This means holders of other mortgages, tax authorities to whom you owe taxes, and unpaid contractors with liens against the house.

If you try and offer short sale your home , it may take 1-3 months or even longer for the bank to approve. If the buyer doesn’t want to wait that long, you could need to look for another buyer.

To persuade the bank to let you offer short sale your home , you’ve got to provide documents proving your claim of fiscal trouble. You should have an experienced real-estate or legal professional negotiate with the bank. The bank will have its own short sale negotiator, and everybody involved in the transaction will probably need to sign an Arms ‘ Length Affidavit to protect against the likelihood of mortgage fraud.

Kendra Chui is a short sale process expert helping homeowners get short sale approved with cash back.

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