There are many flavors of compromise you can strike with your lender if you are facing foreclosure. One of the toughest to execute is the short sale.What Is a "Short Sale"?
The title "short sale" is somewhat misleading; many assume that "short" means quick, implying a transaction that has a short escrow period. Au contraire. A short sale refers to a homeowner's sale of their home for a net sales price (after commissions, closing costs, etc.) that is less than what the homeowner owes their mortgage lender(s).Why Is a Short Sale Desirable?
A short sale is an alternative to foreclosure. A short sale prevents you from having to go through the foreclosure and eviction. A short sale does make a smudge on your credit report but is much less traumatic to your credit than foreclosure.What Makes a Short Sale Hard to Complete?
Because a short sale results in the lender losing (a) funds they are owed and (b) the property which secured the mortgage loan, these transactions must be done with the full participation and agreement of the homeowner's lender(s).
Lenders are institutions, not people. They often move at a snail's pace when evaluating a request for a short sale. Short sales are more frequent in a declining market -- many lenders are simply not equipped to handle the deluge of short sale requests they receive.
Realtors who work on short sale transactions all have stories of trying for weeks to get the short sale "package" to the correct person in the loss mitigation department! Once the package is in the hands of the right person, the bank may have some reason they disagree with the deal between the buyer and seller, and may insist on inserting the bank's price increase, reduction in closing cost credits, or other major alteration of the terms of the deal.
During a short sale, the buyer, seller and even the real estate agents are somewhat subject to the whims of the bank -- the deal cannot be done without the bank's agreement.
For more information about Florence Oregon Real Estate give me a call 541-991-7794 or visit my website www.maureensellsflorence.com
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