What is a short sale?
What is a Short Sale?
Understanding a short sale…
A ‘short sale’ or being ‘under water’ on your home in RI real estate or beyond refers to the ‘shortage’ of monies the lender will be shorted on a home. The home’s market value has fallen below the amount the homeowner owes the Bank on their mortgage. In this situation the homeowner can no longer pay the mortgage on the home for a variety of hardship reasons ( loss of job/hours cutback, medical issues,divorce, job relocation, etc.). The short sale means the bank agrees to ‘forgive’, with qualifications, the amount owed on a home from this borrower.
Update: As of February 2012, U.S. state attorney generals have reached settlement agreements with the 5 largest mortgage servicers in the Mortgage Settlement Agreement. Find out if this settlement will impact and or benefit you as a distressed homeowner.
The short sale home can be a waterfront, ocean front, luxury or coastal RI home for sale as well as a suburban or urban home. There is no discrimination on the size, location or amenities of a home when the borrower has difficulty paying the mortgage and needs to do a short sale. In order to proceed with a short sale, a Realtor must put the house on the real estate market for the seller and get an ‘offer’ from a buyer that the seller accepts. The sales agreement is then presented to the seller’s lender for review.
The lender instead of pushing for foreclosure with the seller will most times agree to a short sale. The lender experiences less of a monetary loss with a short sale then insisting on a foreclosure for the home. There are benefits to a short sale to know and a number of short sale conditions need to be met for a short sale to occur.
Also, there can be tax implications from this forgiveness of monies from both the U.S.Treasury and the lenders/investors on the mortgage loan(s) which can be in some instances a disadvantage to a short sale. Homeowners going through this process should consult their accountant and lawyer to understand any financial consequences to them. The Mortgage Forgiveness Act expires December 31, 2012 which is important for sellers.
How is a seller that is underwater on their mortgage to proceed?
It is important to work with a North Kingstown short sale agent who understands the short sale process and has a ‘team’ (attorneys and negotiators) in place to move the transaction forward for the seller with the lender.
The ultimate goal is to get a short sale approval letter with a waiver of deficiency judgment for the seller. There are times the lender will want a promissory note on a compromised payment plan too to be paid back interest free over years. These are important points to discuss with your Realtor and negotiator.
Ginny Lacey Gorman is a member of short sale superstars and does RI short sales throughout southern RI. I work hard and with success with a legal team in making the short sales happen successfully for my sellers. If you are under water on your mortgage or behind on your mortgage payments call me, Ginny Lacey Gorman, North Kingstown short sale agents, for a confidential interview and to find out your options at 401-529-7849 today. Do not wait – time is of the essence to stay out of foreclosure. What is a short sale?
Ginny Lacey Gorman is your go to North Kingstown Realtor® for real estate in Rhode Island and beyond…knowing the geographic area, schools, happenings, important tidbits of information and businesses well. As a North Kingstown short sale agent, if you are having trouble paying your mortgage contact Ginny to help you through the short sale process successfully. Waterfront, oceanfront, luxury and coastal RI real estate are her specialty but all of RI is her backyard. So feel free to search for RI Homes for Sale. When you are in need of a good professional for your buying and selling needs and an internet savvy Realtor® who sells RI houses in this real estate market - call Ginny at 401.529.7849.