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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2621 Anchor Watch Drive
Wadmalaw Island, SC 29487
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Residential
MLS# 24006420 / Active
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2976 Lodge Berry Lane
Johns Island, SC 29455
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MLS# 24006341 / Active
CONSTRUCTION IS MOVING FAST in Vineyard Lakes on Johns Island. Lot #12 features the WAILER floorplan. The lot has its own private point going out i...
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6417 Highway UNIT #162
Hollywood, SC 29449
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253 Sea Cloud Circle
Edisto Island, SC 29438
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Welcome to idyllic island living at Driftwood Villas in Edisto Beach! This gated golf course community boasts ocean breezes and laid back living. T...
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411 Rowley Lane
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Proposed construction! The beautiful Chadwick is the perfect single-story home. It offers 3 beds/2 full baths and is nestled on the most gorgeous p...
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Moncks Corner, SC 29461
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READY THIS SUMMER! Welcome to the Elston plan, offering a 2-story floor plan with 4 bedrooms and 2 1/2 baths, situated on a private wooded lot offe...
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286 Shadybrook Drive
Summerville, SC 29486
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Beautiful tree lined pond views from your screened in lanai in this four bedroom two and a half bath Rosella Floorplan.This home has a large enetrt...
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40 41st Avenue UNIT D15
Isle of Palms, SC 29451
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Increase +$9,878
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710 S Main Street
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Kiawah Island, SC 29455
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757 Backfield Road
Walterboro, SC 29488
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Welcome to your own private oasis in the heart of the ACE Basin on Horseshoe Creek in Walterboro, SC. This stunning 2755 sf home sits on over 1 acr...
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1006 Retreat Avenue
Moncks Corner, SC 29461
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Step into luxurious living with this meticulously upgraded home boasting exquisite crown molding and wainscoting, setting a sophisticated tone thro...
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81 Avondale Avenue
Charleston, SC 29407
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MLS# 24005865 / Active
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Welcome to this charming single-story home, located in a beautiful neighborhood with easy access to all amenities. As you enter this better-than-ne...
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Mount Pleasant, SC 29464
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This custom-built I'On home overlooks the canal and offers views of stunning Eastlake. This like-new home will impress from the moment you step thr...
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