Short sales allow a homeowner to close on the sale of property when it is worth less than the debts secured by it. Typically, the lender agrees to accept the net proceeds from a closing in exchange for releasing its lien. Lenders are not agreeing to a short sale to be generous, they are convinced that it will come out better than it would by foreclosing on the home and pursuing the borrower for its losses.
While the procedures for a short sale will vary from lender to lender, most lenders need to be convinced of the following:
The Sales Price Is Not Too Low
The sales price of contract is equal to what they would be able to sell the property for after a foreclosure. While the lender may review the market analysis provided by the agent, they will often confirm the market analysis by contacting its own sources, such as an appraiser.
All Costs Associated With The Sale
The commission for the transaction is equal to the commission it would pay its agent for selling the home after foreclosure. The lender will need to know as precisely as possible the amount of proceeds it can expect to receive from the sale.
A Good Reason They Should Accept It
The lender will want an explanation of the circumstances, which caused short sale in the first place. These usually include death, medical problems, divorce, loss of a job, or a job displacement requiring a move.
A Financial Package On The Seller
The seller doesn't have the resources to make up the mortgage shortfall on their own. The lender will require a full assessment of the financial condition of the seller. Financial statements, income and expenses, tax returns and the seller's paycheck stubs should be provided. The seller's financial condition is a tricky proposition. While the lender will be reluctant to approve a compromise without reviewing strength of the seller, this information will help the lender in pursuing the seller for a post-foreclosure deficiency if the short sale does not take place.
So What Is The Risk?
A seller with few assets, little or no income, and a willingness to file bankruptcy has little to lose by providing this information. Those with other assets, a good job with garnishable wages, or a desire to avoid bankruptcy will put themselves at risk in the process. Those considering a short sale need expert legal advice regarding the wisdom of submitting financial information to the lender.
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117 Wappoo Landing Circle
Charleston, SC 29412
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MLS# 24013141 / Active
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***This property is zoned general commercial**Welcome to this unique, versatile, and commercially zoned property, 5580 HWY 162. This historic 1952 ...
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** LEASE TO PURCHASE AVAILABLE ** MOTIVATED SELLER ** Nestled in a private neighborhood, this stunning custom-designed residence offers comfort, be...
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1101 Reserve Way
Summerville, SC 29485
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Dewees Island, SC 29451
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2159 Parkway Drive
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Under construction! The Juniper plan is a single story home with vaulted ceilings and ample windows in the great room, allowing plenty of natural l...
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MLS# 24013064 / Active
Almost new home available in Cane Bay, Built in 2022. House has a very open floorplan with laminate wood flooring in the main living area on the fi...
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Isle of Palms, SC 29451
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DRAMATIC PRICE REDUCTION! Welcome to 1212 Ocean Club! Located in the exclusive gated Ocean Club community in Wild Dunes. This is a much sought afte...
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Summerville, SC 29483
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Spacious and modern, this property boasts a contemporary design with an open floor plan that maximizes natural light. The main living area features...
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Welcome to 205 Valley St!! This historic home, built in 1914, offers approximately 4,174 sq. ft. on 1.01 +/- acres in the well-known Historic Hicko...
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Move in Ready! 1 Acre Lot at the end of a quiet cul-de-sac backing up the the Francis Marion Forest. Home features 10' ceilings throughout, a downs...
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READY NOW! This townhome boasts an open interior design offering easy living. The eat-in kitchen has granite topped counters, 42'' upper cabinets w...
Increase +$5,000
2643 Seabrook Island Road
Seabrook Island, SC 29455
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Residential
MLS# 24013005 / Active
This is your opportunity to own one of the greatest golf views on Seabrook Island. This home has stunning panoramic views of the 3rd green and fair...
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345 Longshore Street UNIT #933
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