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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3862 Delinger Drive
Mount Pleasant, SC 29466
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27 Planters Retreat
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139 Morning View Way
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READY THIS FALL! The Elston floorplan features a large kitchen and great room divided by a kitchen island, perfect for a combined living and dining...
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The Galen floorplan features a foyer that leads into a beautiful open kitchen and living area! The kitchen features a large island and walk-in pant...
Increase +$2,685
132 Morning View Way
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This homesite offers a wooded lot. Discover your dream home at Lakeview at Kitfield! Perfectly situated near incredible attractions Lake Moultrie, ...
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This fabulous home was designed to not only capture the spectacular sunsets but also embrace its open floor plan. With over 3600 square feet in the...
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Huger, SC 29450
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318 N Magnolia Street
Summerville, SC 29483
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MLS# 24011890 / Active
Homes built in the 19th century were sturdy and proud. 318 N. Magnolia Street in the heart of Summerville, built in 1883, still reflects these qual...
1011 Victoria Pointe Lane
Summerville, SC 29485
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MLS# 24011868 / Active
Nestled in the tranquil community of Victoria Pointe, this property presents a rare opportunity for homebuyers. This meticulously maintained reside...
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This charming brick townhome is located in a quiet area near Lake Marion and area golf courses. It's also near the Santee National Wildlife Refuge....
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