Sharon Esslinger
(309) 596-4228
(309) 596-4228
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Sharon Esslinger (309) 596-4228 |
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Short Sale ProcessShort Sale Information
What is a Short Sale? Home sellers should consider a Short Sale when the value of their home is LESS than the amount of their outstanding loans. For example, if your home is worth $250,000 but you have a loan of $260,000 then a short sale is a consideration. Obviously, if you do not have to sell your home, you could wait out the market and hope for a turnaround in real estate values. However, if you do have to sell your home you basically have three options. First, you can bring cash to the table. In the example above you would sell your home for $250,000 and pay another $10,000 to the lender out of your pocket to pay off the loan on your property. Second, you could let the home go into foreclosure. The lender will go through the foreclosure process, force you out of your home and then auction it off to the highest bidder at a foreclosure or Trustee's auction. The third option is to pursue a short sale. You contact the lender, explain the circumstances, and convince them to take less than full value of their loan. In the case above you may tell them you have a buyer for $250,000 and it's very unlikely there will be a buyer at a higher price. If they will accept $250,000 for their $260,000 loan then you can proceed with a short sale. Sometimes the lender will consider a short sale before you have a buyer and you can market your property and, if you find a buyer, take their offer to the lender for consideration. The lender may or may not accept the offer. Why Might a lender Accept it? While most lenders will not be thrilled at the prospect of a short sale they are acutely aware that a foreclosure is usually a far more time consuming and costly option. In a real estate market where housing values are going down it is in the best interests of the lender to liquidate their problem loans as quickly as possible. With a short sale a property can be sold and the loan taken off their books fairly quickly. If they pursue a foreclosure they run the risk of the process taking a substantial amount of time during which the value of the property is depreciating. Also, buyers will tend to write low ball offers when they know that a bank or lending institution owns the property. The property will also be left vacant which can result in vandalism and deterioration. Some owners will even gut the house just before the foreclosure sale as a way to "get back" at the lender. This is illegal but nonetheless happens on occasion. So, you can see why a lender might want to go the short sale route and get the loan off of their books with minimal hassle. The Credit Consequences of a Short SaleThe credit consequences of a short sale and foreclosure vary slightly. The general consensus is that a short sale will show up on your credit report as a"settlement", "settlement for less than owed" or a "pre-foreclosure in redemption". Also, since most lenders will not consider allowing a short sale until a few payments have actually been missed you may also have a few "lates" on your credit report. Neither of these marks is a good thing to have but it's possible to get them off of your credit report within a few years or less. A short sale can drop your credit score by 80-100 points. There is also the possibility that through negotiation with the lender you can avoid having the short sale reported to a credit agency. A foreclosure on your credit report can take 7-10 years to remove and can cost your credit rating (FICO) up to 200-280 points which is a very big hit. So, if you have no better alternatives pursue a short sale aggressively and avoid foreclosure.
Has your property had a significant decrease in value?
If you have answered yes to any of these you are a good candidate for a short sale……
Well the answer is yes! Sharon has negotiated short sales with many banks!! Sharon is an expert at these types of deals! What kinds of fees are involved in a short sale? The commission on the sale of the house this gets paid by the bank so it doesn't cost you a thing. The Process 1. The application and paper work gets done & a game plan is put together by Sharon
STOP Foreclosure & Save Your Credit For Free! Toll-Free Recorded “Short Sale” Tele-Class Call (800) 380-6824, Ext. 9999 To Listen Free & Learn More!!
Sharon Esslinger, Broker, CRS, GRI RE/MAX Country Crossroads 1303 17th Avenue, PO Box 156 Viola, IL 61486
Direct Line - 309-596-4228 Fax - 309-596-4229
eMail - SharonE@winco.net Website - www.SharonEsslinger.com
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