In the past few years I have worked out a number of short sale payoffs for homeowners faced with foreclosure in Nashua, Hudson and surrounding areas. Those homeowners that took the steps to consult with a real estate agent that is familiar with short sales were able to get away from a foreclosure on their credit.
A short sale is when the home no longer has enough equity in the home to cover the seller’s closing costs and the amount needed to pay off the mortgage. The bank would rather work out a short sale for the property instead of having to foreclose. But there is a catch.
In order to qualify for a short sale, the homeowner must show proof that their financial situation has changed since they first purchased the home and they are in a situation where foreclosure is inevitable.
A qualified Short Sale must be justified with cause. A few examples of qualified reasons to justify a short sale are:
- Illness of a borrower or co-borrower
- Death of a co-borrower.
- Divorce or legal separation
- Involuntary loss of job or a significant modification in pay.
- Illness of a family member wherein the borrower or co-borrower are the only ones that can provide care.
There are several other situations that would effect proper qualification. The important thing to remember is that they must be qualified and proven in writing to the lender.
One other thing to keep in mind is that the home must sell at or close to what is considered fair market value for the area. Most buyers have the misconception that a home in a short sale situation can be purchased at pennies on the dollar. The actual truth is that even though the lender will accept a sale for less than the current market value, they will only accept the offer if it is within 10-15% of the current appraised value, depending on the lender.
For more information regarding short sales or if you are a homeowner in New Hampshire or Massachusetts and you think you may be heading towards the need to sell your home for less than what is owed to the lender, please call or email to schedule a free consultation. http://www.MLSHomeScout.com
