Are you searching for the best family law attorneys in brevard county because you are going through divorce and you owe more than what your house is worth? Simply put, a short sale is one in which the seller accepts an offer that won’t cover the total amount they owe on their mortgage and the seller ends up “short” on paying back their lender. According to recent data from real estate information company, RealtyTrac, 5.1% of all single-family home and condo sales in early 2016 were short sales. Often, homeowners are pushed into a short sale by significant personal financial troubles – such as divorce – that make it impossible for them to pay their monthly mortgage, and they find it hard to sell for a price that enables them to pay off their loan. Short sales were incredibly common across communities during the housing bust of 2008. Below, find out what benefits there are for the seller, buyer and how exactly a short sale occurs and how the best family law attorneys in brevard county can help.
How a Short Sale Happens
Short sales begin like any other home sale. The seller contacts a realtor (ideally one who has intimate knowledge of short sales), list your home mentioning that it’s a short sale/subject to lender and wait for offers to come in. Once the offer is accepted, things become more complicated. In order to complete a short sale, the bank must agree to the sales price. Because they lose money on short sales, they aren’t quick to hop on board. Some banks may even prefer to foreclose, since they not only assume ownership of the property, but may receive bailout money from the homeowner’s mortgage insurance policy. However, a short sale could appeal to a bank because owning and selling property can be quite a hassle.
When assessing whether or not to approve a short sale, banks will require sellers to submit paperwork including an offer letter and a “hardship letter” explaining why the seller is no longer able to make monthly mortgage payments. The lender will also want to see financial documents like income statements or medical bills to verify your financial status. Then, the lender will most likely have the home appraised to determine whether the offer received is fair or not. If they decide it is fair, they may allow the seller to complete the sale, but there are often extra stipulations.
Benefits to Sellers and Buyers
Although a short sale is never ideal, many experts argue that it is far smarter to do a short sale rather than pursuing more drastic measures like bankruptcy or foreclosure. A short sale will do far less damage to a homeowner’s credit report and credit score than a foreclosure, which means that the seller will be in better shape to apply for a mortgage and buy a new home in the future. Additionally, homeowners are able to stay in the home until the sale is complete, while foreclosures force homeowners to vacate. Typically, a seller is responsible for all real estate commissions and other closing costs, but in a short sale, the seller pays nothing and the lender absorbs these costs.
Short sales can also benefit buyers by providing a great bargain, but there are more hoops to jump through than in a traditional sale. A short sale is not always ideal for first-time buyers, who might get frustrated with the extra paperwork and long waits. A traditional sale takes 30 to 45 days to close after the offer is accepted. A short sale typically takes 90 to 120 days, or even longer.
The delays are a result of the lenders – who are stuck paying closing costs usually covered by the seller – countering with their own demands in an effort to raise their bottom lines. It isn’t unusual for buyers to hear something like “we will accept the offer but the buyer is responsible for all repairs, wire transfers and notary fees” from the lender. The buyer can negotiate the terms to decide whether it is a benefit to buy or whether it’s better to walk away.
While a short sale may not be ideal, if it’s done right, sellers, buyers and lenders can all walk away from the deal happy. Short sales may be far more beneficial than having to declare bankruptcy and they can be a great bargain for buyers. If you are going through a divorce, consider finding the best family law attorneys in brevard county that work with Certified Cash Home Buyers like Anchored Homes.