Lots of people bought homes when the market was sizzling a few years ago. Now homeowners all across the country and here in Costa Mesa and throughout Orange County are facing the fact that many homes are worth considerably less than they were at the time of purchase. While this may seem disappointing, the fact is that the real estate market goes up and down and the GOOD NEWS is history shows that real estate is a great investment over the long term.
Real estate may be a pretty sure bet for the long term… So what happens when homeowners end up suffering in the short term? Specifically, what happens when people can’t afford the pricey mortgage payments that come with the high price they paid for their homes when the market was on fire? Circumstances like this often lead to foreclosure, which is when the bank repossesses the home because the buyer is unable to pay their mortgage. Foreclosures scar financial records for years. Fortunately the short sale may be an option for some people facing foreclosure.
Real estate expert Elizabeth Weintraub wrote a great piece about short sales and we’d like to share the highlights.
So who can qualify for a short sale?
1. People whose homes have dropped significantly in value.
The balance owed on the home will need to be more than what the home is worth.
2. Those who are facing tough times financially.
These issues will need to be documented in a letter of hardship and submitted to the lender. Some examples that constitute a hardship are divorce, loss of employment, illness, bankruptcy, or death.
3. The seller must have no other assets.
If they do have assets, the lender may consider them as a potential means for paying back the loan… So no other assets is key.
4. Mortgage must be at or near default status.
Getting qualified for a short sale is a huge victory for anyone facing foreclosure because the results are much more promising. One of the biggest advantages is that sellers are able to stay in their home throughout the selling process rather than facing the bank’s eviction time frame. Sellers must be able to put their confidence in an agent they trust who understands the short sale process and will market the home to get it sold. When a buyer makes an offer, the agent needs to be knowledgeable & persistent to make sure the lender responds to all offers promptly. Then everyone wins – the lender has a newly approved buyer, the buyer gets a great home, and you have the chance to move on!
Please feel free to call or email us for more information if you are considering selling or buying a short sale. We’ve had 100% success with all of our short sales in Costa Mesa and the surrounding communities in Orange County.
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