If you are behind on your mortgage you have several options, including simply letting your home go to foreclosure, or listing it for sale as a short sale. For most people, the difference between a short sale and a foreclosure is significant. Based on recent lender guidelines for various loan products, an owner who lets a house go into a foreclosure typically faces a seven year waiting period before being able to qualify for a conventional loan. Whereas, a short sale may mean little or no waiting period before a borrower will qualify for a home loan. Essentially a short sale is a sale where the lender agrees to accept less than the full amount owed in full satisfaction of the loan. If a short sale is negotiated properly the buyer gets clear title and the seller is relieved of further liability on all loans against the home.
A short sale may be a right solution for many people with one or more of these problems: a loan value higher than the home’s fair market value (underwater house); a high interest loan; or a balloon payment coming due in the near future. By utilizing a short sale a homeowner may be able get out from under a bad loan or an underwater property in time to take advantage of the current low home prices and historically low interest rates in purchasing a new home.
For many people, it is simply not an option to wait for real estate values to rise to provide enough equity to sell their home. Real estate values and interest rates are both rising. Doing nothing in the hope of weathering the storm is not a wise financial strategy. It makes sense to get out from under a bad loan and start planning for purchasing a new house before prices and interest rates put that house beyond reach.
At Iwama Law Firm, we have assisted hundreds of clients in the short sale processes. While short sales can be managed by non-attorneys, the value of legal representation is that your interests will be represented by attorneys with experience in real estate and in the short sale process. We bring to your transaction many years of experience in real estate, including mortgage issues, the foreclosure process, bankruptcy options if necessary, as well as other options a borrower may have. Our experience is well beyond a real estate broker’s knowledge and experience.
Contact us for a free case evaluation if you are thinking about a short sale.