Prevent Foreclosures

Posts Tagged ‘short sales’

If you have an upside down mortgage, you may have heard of a short sale. Below explains what is a definition of short sale foreclosure.

Definition of short sale foreclosure

When you owe the mortgage company more than your home is worth. (You can find out what your home is worth for free using the link on the right hand side.) Then even if you sell your home, you will not have enough money to pay off your mortgage balance. In this case, there is a solution and it
is called short sale or real estate short sale or foreclosure short sale.

What happens in a short sale foreclosure?

When a homeowner realizes that he or she is upside down on his or her mortgage, he or she can find a realtor or a real estate investor to help him/her with a short sale.

As your mortgage company is getting to foreclose on your home, you can have a real estate investor send them a short sale proposal letter. In the letter, the real estate investor will express his or her interest in buying your home to avoid foreclosure. By buying your home, he/she will save everyone from the headache of foreclosure.

Since you owe more than your home is worth, the real estate investor or realtor will convince the bank to accept less than the amount you owe for the property. For example, if your mortgage balance is $200,000 and your home is now worth only $150,000, you are "upside down" $50,000. If you contact the bank yourself and ask them to take $150,000 they are unlikely to listen.

However if you prove to them of your hardship, provide them with a willing buyer who is the one doing the short sale, and convince them that if they did not accept the short sale then they will have to file for foreclosure and sell your home in an auction which could be much less than the short sale price offered. If the short sale is done right and the real estate investor is experienced at doing short sale, then the bank is likely to accept less money than the actual amount that you owe.

What's the best that can happen in a Short Sale?

In a successful short sale case, you walk away free and clear, the real estate investor buys the property and the bank settles. A realtor can usually find you a buyer who is willing to do a short sale with the bank.

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