| Short Sales vs. Foreclosure vs. Deed in Lieu |
SHORT SALE: In a nutshell, a Short Sale is when your lender agrees to accept a
lower price for your home than your actual payoff amount or the amount of your
current loan. Due to the current declining market, home values have dropped and
the current market value of your home may be considerably less than what you owe
on your home. Selling your home as a Short Sale has many benefits to you. A Short
Sale may help you save your credit, as a short sale does not have as adverse of an
effect on your credit score as a Foreclosure or a Deed in Lieu. Secondly, the length
of time that you need to wait until you can purchase another home is shorter with a
Short Sale than if you had let your home go into Foreclosure or if you turned your
home over to the bank with a Deed in Lieu.
You will have to qualify for a Short Sale. I can help you through this process of
qualifying you with the bank and actively marketing your home as a Short Sale. I will
handle all negotiations with the bank on your behalf. Remember that a Short Sale is
a lengthy endeavor and patience is a must. The average Short Sale from start to
finish can take up to 4 months to complete.
All costs involved in selling your home as a Short Sale including any requested
repairs to your home, home warranties, closing costs, Realtor commissions are paid
for by the bank. You will have absolutely ZERO out of pocket expenses in this
process. If your home does not close escrow - you owe nothing.
REMEMBER: DON'T TRUST JUST ANYONE WITH YOUR SHORT SALE. THERE ARE
MANY THINGS TO CONSIDER BEFORE YOU DECIDE WHETHER OR NOT A SHORT SALE
IS RIGHT FOR YOU. ALL BANKS HANDLE NEGOTIATIONS OF THEIR SHORT SALES
DIFFERENTLY AND EXACT CONTRACT WORDING AND FULL DISCLOSURE OF YOUR
EXPECTATIONS IS CRUCIAL TO A DESIRABLE RESULT.
Many people are unaware that the bank can still come after you up to 4 years after
your Short Sale closes for the amount of the deficiency. The Mortgage Forgiveness
Act does not include Short Sales.
FORECLOSURE: When you become late on your mortgage payments your
Financial Institution will begin pre-foreclosure proceedings. All Financial
Institutions handle this a little differently, but generally they will order an appraisal
on your home either with an appraiser or with a real estate agent. A bank may even
order two or more appraisals in order to determine what the current market value is
on your home. When a real estate agent performs this valuation it is called a BPO
(Broker Price Opinion).
The Foreclosure process can take many months before an Eviction Notice is issued.
The next step will be a public Auction where your home may be sold to the highest
bidder. Many homes do not sell through this Auction process. If that becomes the
case, then the home is taken over by the Financial Institution who then puts in their
own Real Estate Agent to handle the sale of the home as a REO or Bank Owned
Property. Again, an appraisal or a BPO is ordered to ensure that the home is listed
at current market value.
DEED IN LIEU OF FORECLOSURE: This process is essentially the same as a
Foreclosure, however, in a Deed in Lieu you are voluntarily giving your home back
to the Financial Institution. The Financial Institution proceeds from there as a
Foreclosure property.
Both Foreclosure and Deed in Lieu carry the same penalties, both on your credit
score and in the length of time before you can purchase another home.
PLEASE NOTE: SHORT SALES, FORECLOSURES AND DEEDS IN LIEU
MAY CARRY SUBSTANTIAL RISKS TO YOUR OVERALL CREDIT AND
POSSIBLE TAX IMPLICATIONS. CONSULT WITH AN ATTORNEY AND/OR A
TAX CONSULTANT BEFORE PROCEEDING.
Click on the following link to find out more about "The Mortgage Forgiveness
Act of 2007". http://www.irs.gov/individuals/article/0,,id=179414,00.html
lower price for your home than your actual payoff amount or the amount of your
current loan. Due to the current declining market, home values have dropped and
the current market value of your home may be considerably less than what you owe
on your home. Selling your home as a Short Sale has many benefits to you. A Short
Sale may help you save your credit, as a short sale does not have as adverse of an
effect on your credit score as a Foreclosure or a Deed in Lieu. Secondly, the length
of time that you need to wait until you can purchase another home is shorter with a
Short Sale than if you had let your home go into Foreclosure or if you turned your
home over to the bank with a Deed in Lieu.
You will have to qualify for a Short Sale. I can help you through this process of
qualifying you with the bank and actively marketing your home as a Short Sale. I will
handle all negotiations with the bank on your behalf. Remember that a Short Sale is
a lengthy endeavor and patience is a must. The average Short Sale from start to
finish can take up to 4 months to complete.
All costs involved in selling your home as a Short Sale including any requested
repairs to your home, home warranties, closing costs, Realtor commissions are paid
for by the bank. You will have absolutely ZERO out of pocket expenses in this
process. If your home does not close escrow - you owe nothing.
REMEMBER: DON'T TRUST JUST ANYONE WITH YOUR SHORT SALE. THERE ARE
MANY THINGS TO CONSIDER BEFORE YOU DECIDE WHETHER OR NOT A SHORT SALE
IS RIGHT FOR YOU. ALL BANKS HANDLE NEGOTIATIONS OF THEIR SHORT SALES
DIFFERENTLY AND EXACT CONTRACT WORDING AND FULL DISCLOSURE OF YOUR
EXPECTATIONS IS CRUCIAL TO A DESIRABLE RESULT.
Many people are unaware that the bank can still come after you up to 4 years after
your Short Sale closes for the amount of the deficiency. The Mortgage Forgiveness
Act does not include Short Sales.
FORECLOSURE: When you become late on your mortgage payments your
Financial Institution will begin pre-foreclosure proceedings. All Financial
Institutions handle this a little differently, but generally they will order an appraisal
on your home either with an appraiser or with a real estate agent. A bank may even
order two or more appraisals in order to determine what the current market value is
on your home. When a real estate agent performs this valuation it is called a BPO
(Broker Price Opinion).
The Foreclosure process can take many months before an Eviction Notice is issued.
The next step will be a public Auction where your home may be sold to the highest
bidder. Many homes do not sell through this Auction process. If that becomes the
case, then the home is taken over by the Financial Institution who then puts in their
own Real Estate Agent to handle the sale of the home as a REO or Bank Owned
Property. Again, an appraisal or a BPO is ordered to ensure that the home is listed
at current market value.
DEED IN LIEU OF FORECLOSURE: This process is essentially the same as a
Foreclosure, however, in a Deed in Lieu you are voluntarily giving your home back
to the Financial Institution. The Financial Institution proceeds from there as a
Foreclosure property.
Both Foreclosure and Deed in Lieu carry the same penalties, both on your credit
score and in the length of time before you can purchase another home.
PLEASE NOTE: SHORT SALES, FORECLOSURES AND DEEDS IN LIEU
MAY CARRY SUBSTANTIAL RISKS TO YOUR OVERALL CREDIT AND
POSSIBLE TAX IMPLICATIONS. CONSULT WITH AN ATTORNEY AND/OR A
TAX CONSULTANT BEFORE PROCEEDING.
Click on the following link to find out more about "The Mortgage Forgiveness
Act of 2007". http://www.irs.gov/individuals/article/0,,id=179414,00.html