What Is a Short Sale?
Short sales can be beneficial to homeowners as well as lenders. Lenders often receive more money for short sales than foreclosures, and they do not need to be involved with property upkeep and disposal. Short sale houses are generally in better condition than foreclosures because the homeowners want to sell their properties as fast as possible.
How a Short Sale Works
The homeowner is unable to make mortgage payments, or it does not make any sense for them to do so because the loan balance is higher than the market value of the property. The homeowner contracts with a short sale real estate specialist to market the house. A buyer submits an offer to purchase the house. This offer is forwarded to the lender with a short sale package of documents. The lender evaluates the package and decides whether to accept the offer.
How to Qualify for a Short Sale
The depressed value of the house is the most obvious requirement for a lender to approve a short sale, but the homeowner has to meet other qualifications as well.
There must be a financial hardship. Lenders only recognize certain hardships when approving a short sale. These include chronic illness, job loss, death of a borrower, divorce, incarceration, military deployment or involuntary job relocation. Some lenders will consider approval if there is a new addition to the family such as a new baby or an elderly family member; other lenders will not recognize these situations.
To get more in depth information about your specific situation it is important that you find a great short sale specialists near you to determine if a short sale is a viable option.