What is a Short Sale
Exactly what is a Short Sale?
What is a Short Sale? A short sale occurs when the sale of a property does not bring the seller enough money to pay what is owed to the lien holder. When the sale falls short of the amount owed on the mortgage, the bank must agree to release the homeowner of any debt that otherwise may have been incurred. Sounds simple but it can be complicated to execute. Making a short sale purchase can be a long and drawn out process. Sometimes the outcomes are well worth the roller-coaster ride of emotions. Other times they can be a huge disappointment.
Buying a short sale in MN
Whether you are a buyer or a seller involved in a short sale the best way to handle the process is to work with a professional, ethical and honest Realtor who has experience dealing with short sales and is a certified short sale and foreclosure resource. A Realtor that has not taken the time to be trained, educated and certified to sell distressed properties will not have the energy, knowledge and skill necessary to pull off a successful short sale.
Short Sale in MN vs Foreclosure in MN
A short sale can be one of the best ways for a homeowner to get out of a home that is in an upside-down mortgage situation because it will not completely destroy their credit. The average credit score decline for a homeowner that goes through a successful short sale is 50 points. The average credit score for a homeowner that goes through a foreclosure is 250 points.
Help with a Short Sale and Help with a Foreclosure
Although things are better for some, there are still many people suffering. It may be job loss, income reduction, debt, or the threat of foreclosure. Sadly, the national statistics say that 80% of all people that suffer the loss of their homes never contacted a professional for advice on their options. The FHFA (Federal Housing and Finance Agency) recently announced that they have reached a milestone of 3 million foreclosure preventions.
Statistics published by DA News and Five Star show that approximately one in 8 of all mortgages in the US are still in default and in need of help. 3.1 million homes are 30 days in default, 1.3 million homes are 90+ days in default but not in foreclosure, and 1.2 million homes are in foreclosure. That is over 5 ½ MILLION families still in trouble.The positive impact on an individual or family when a short sale is successfully closed is significant.
Since there are lots of moving parts when you successfully sell short, homeowners should be completely educated on the process before attempting one. It is very important that you seek advice from your attorney and CPA prior to beginning the short sale process.
The most important takeaway you can have from this post is that you seek advice from your attorney and CPA prior to beginning the short sale process.