Knowing what is involved in short selling your property is essential. To cover your debt, the bank or lender will take a portion of the sale proceeds. This is a good thing for the bank. To determine a fair selling price, the seller must carefully review comparable sales in that area. The expertise of an agent is priceless. While a buyer may be tempted to pay less, the agent will help them determine the fair market value of the property.
Another advantage to a short sale is the shorter waiting period for a mortgage. If the short sale is approved, you can get a mortgage in as little as two to four years, compared to three to seven years for foreclosure. Another benefit is that you avoid the risk of a deficiency judgment, which is when a lender goes after you to make up the shortfall. It is possible that it will take several months to get approval for a short-sale.
The first step in the short sale process is obtaining a market appraisal. It is a good idea to have several appraisers give you an accurate valuation. The lower the appraisal is, the more likely the bank will agree to a short sale. It is important to show the lender that you would lose money if your home was foreclosed. For borrowers who are behind on their mortgage payments, the only way to avoid foreclosure is through a short sale.
The next step is filing a hardship letter with the lender. The lender will only approve a short sale if the homeowner has recently fallen on hard times. A sudden health crisis is likely to convince a lender than a long-standing issue. A short sale package is a great way to get the approval you need if you are unsure about your ability to pay. A short sale can be a great option to sell your house without making a large mortgage payment.
After you submit your financial packages, the bank will accept them. This process can take several months or even weeks. The bank can also decide to make a counter-offer, resulting in a longer closing process. The bank is more likely to deny your application for a short sale if the process takes longer. To speed up the process, a real-estate attorney or broker can be helpful. If you’re considering a short sale, make sure to consider all the details involved.
Once your lender has approved you, you will need to file a 1099 C tax form detailing the amount owed. The borrower will also receive a 1099-C tax form for the amount of money they owe to the bank. If your home is sold for $70,000, and your lender collects $100 in tax, you will be assessed a tax on that amount.
If you have a good credit rating, short sales are a great way to avoid foreclosure and the costs associated with that process. The process can take several weeks to complete, depending on the lender’s backlog of foreclosures. The lender’s approval of your short sale is also contingent on the original lender’s willingness to accept the deal. It is difficult to complete short sales so be patient. If you need to sell your home quickly, it’s best to set a fair price and market it to your target buyers.
Because the bank pays the agent’s commission, short sales provide homeowners peace-of-mind. Short sales are a great way for homeowners to keep their homes while the process is underway. Additionally, sellers don’t have to pay the real estate agent’s commission. A lender will usually pay the closing costs of a short-sale. This can save you a lot of money in the long run. In the long run, short sales also mean that you can buy another home.
The decision to purchase a short-term home depends on your individual circumstances. Before you make an offer, do your research. A real agent will be able tell you about any foreclosure filings, and how much the seller owes. You may need to negotiate with sellers to get the best deal. If you’re not happy with the terms, walk away.