Short Sales

Minnesota Short Sale Seller’s Guide

Do you owe more than your home is worth?   Do you need to sell your home but can’t bring the cash difference to a closing.  If you have a hardship, you may qualify for a  short sale.  Learn what happens during a short sale and see if you are a candidate.

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Minnesota Short Sale Buyer’s Guide

Are you considering buying a property that is being marketed as a short sale?  If so, why not get this guide today.  It it free and useful.  Once you understand the process, you will know what to expect.  One of the biggest problems I see in the marketplace is people not willing to get the knowledge upfront and then expecting a different outcome.  Don’t let a short sale be a frustrating experience.

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The Short Sale As An Option To Avoid Foreclosure

With the housing market in the worst slump that it has seen in years, and fewer and fewer buyers out there, you may find that you are in a position where you are unable to make your payments.  With foreclosure looming large, and so many people who have already fallen prey to it, it is easy to feel as though you have no options available to you, but the truth is just the opposite.  When you are in a place where you are going to lose your home, you will find that there are things that you can do to soften the blow.  One of the best things that you can do for yourself when you are in a place where you are facing foreclosure, looking into a short sale might be one of the most important things that you can do.

To really understand what a short sale can do for you, you need to understand what a foreclosure is and what is happening to your property.  A foreclosure is essentially the process where a lender goes through legal channels and terminates your right of redemption.  In many cases, this can only happen when a payment has been missed, though the payment missed may not even be a mortgage payment. Other payments that may be missed include local taxes and even home owner’s association fees.  In some states, you may be given a chance to make the payment, but if the payment cannot be made, the home will usually go to auction.

Along with the issue of losing your home, you will also find that going through the process of foreclosure is one that can have severe consequences for you.  For instance, you will find that going through a foreclosure will cut your credit by 300 points, which is the heaviest hit that your credit can take!  In addition to this, this is a fact that you will need to disclose in future mortgage applications and even in some job applications.  Furthermore, you will also find that you will be ineligible for any government insured loan for between five and seven years.  This is something that can make a great deal of difference to any plans that you have for your future.

When you think about all of these consequences, you will find that one of the solutions that presents itself is a short sale.  At the most basic level, a short sale is a situation where the lender will agree to accept less money than the amount that is owed against the home, for the most part because there insufficient equity that would result from selling and paying the costs of the sale.  In most cases, you will find that a lender is only willing to negotiate for a short sale when there has been financial hardship that has prevented you from paying and monthly shortfalls that come out to being a financial handicap towards paying.  You should also keep in mind that when you try to negotiate a short sale that you should not have liquid assets that can be tapped for repayment.

With all of that in mind, what advantages does a short sale give?  After all, you will still be losing your home, and your credit rating will still dip.  The truth of the matter is that a short sale may very well be the best way out of a bad situation. The first advantage, which can be the one that makes all the difference, is the fact that a short sale can make you eligible for a home sale much sooner.  You may find that you will be able to get a new home again in as little as two years.  You will also find that when you have a short sale on your records, as opposed to a foreclosure, that you will be able to qualify for a government insured loan again in roughly two years.

Second, you will find that while it is true that your credit will suffer from having a short sale on your record, it will also be easier to recover in the long run.  When you have a short sale, you will risk having your credit slashed by two hundred to three hundred points.  This is just as bad as having a foreclosure, but what you may not realize is that you can recover from this set back a lot easier.  In fact, many people manage to recover from having a short sale simply by keeping one or two credit cards and keeping them current.

Take some time to consider how best to proceed with a short sale.  For example, you will find that the sooner you get proceedings for one under way, the more likely it is that you are going to be able to get your lender to see things your way and allow the short sale.  Remember that the lending institution is not under an obligation to allow a short sale, and in many ways, this is something that can be quite difficult for them to work with.  Make sure that you apply for one before you miss a payment.  Look ahead at your finances and make sure that you consider what your options are going to be and what you can do to make the best out of what can be a very bad situation.

Many people look into the aid of a trained short sale negotiator to help them.  Having a professional on your side can be a huge advantage, and at the end of the day, this can make all the difference.

Take some time to really consider what your options are going to be.  You already know that you do not want to go into a foreclosure, but what can you do to make sure that you are going to be getting the results that you need?  Consider a short sale and see where this significantly more forgiving option can take you.

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Looking at Short Sales and Understanding Your Options

With the economy in the shape that it is in and with foreclosures happening left and right, you need to be in a position where you know what is going on with your finances and what it might be doing to your ability to pay your mortgage.  A foreclosure is very close to being a homeowner’s worst nightmare, but even when losing your house is inevitable, you will find that there are choices that you can make that will cushion the fall.  Consider what your options are going to be and really take some time to research what your choices are.  Foreclosure is not necessarily the only choice that you have, and by making sure that you are educated on the subject, you will find that it is much easier to get the results that will see you towards recovery sooner.

In the first place, consider what your options are when it comes to a short sale.  Essentially, when you do a short sale, you are selling your home for the remainder of the amount of the mortgage.  It can be quite hard to get the lender to agree to this sort of loan because they will often end up losing money on it.   Do not assume that this is a possibility unless you have been talking with your lender and being open and clear on the communication that is going back and forth between you.  Take some time and really consider how your relationship with your lender is, and remember that the earlier you initiate proceedings, the easier it will be to get this kind of loan.  Essentially, you are asking the bank or lending institution to take a lower pay off.

While doing this can stop the foreclosure, keep in mind that it is not an ideal situation.  You will discover that you will still end up losing your home and your credit score will still sink around three hundred points.  On the other hand, you will be able to qualify for a government secured loan much more quickly than you would have been if you were dealing with a foreclosure and you will be able to maintain a great deal more control over the procedure.  The decision to go ahead with a short sale is something that many people have to think about, but if you want a mortgage foreclosure canceled, this may be just what you need to do.

A short sale is something that may be discussed when you are dealing with an upside down loan.  With an upside down loan, you will find yourself in the awful position of owing more on a property than it is properly worth. Though it seems counter-intuitive, you’ll find that there are a number of ways that this might happen.  The most common way that people find themselves in upside down loans today is due to the faltering housing market.  More and more people are realizing that they have loans on houses that would sell for a great deal less money than when they bought them.  If you find yourself in this situation, a short sale might be your only option when it comes to getting a mortgage foreclosure canceled.

Remember that there are many qualifications that need to met before you can get a short sale.  The first and best thing that you can do to make sure that you have a better chance of getting one is to talk with your lender right away.  As soon as you are sure that you are going to be missing a payment, call your lender to talk about the options that you have.  Remember that when you are dealing with the lender that you are essentially asking them to take a loss.  You may need to pitch it in such a way as to tell them that the loss that they are going to be taking this way is still less than the loss that they would be taking otherwise.  It is not a pleasant conversation to have, but in many ways, it is a necessary one.

Be aware that when you are applying for the possibility of a short loan that you need to consider being able to write a hardship letter.  Essentially, a hardship letter presents your situation to them in a blunt and straightforward and lets them know a little bit about what you are gong through. It should be honest and it should tell them all the details that they need.  You are using this letter to let them know that the situation that you have encountered is beyond your control.  Things that may be included may be the loss of a job, a death the family, or an illness that has caused problems in your life.  When writing this letter, make sure that you do not fall into the trap of complaining about the company that has loaned you the money or how they have made your situation worse.

If you are looking into applying for a short loan, you may also find that it would work in your favor to get to get a third party on your side.  To this end, you may wish to consult with a representative of the Homeowners Preservation Foundation or HOPE NOW, which are two non-profit agencies that can give you the counseling that you need to get you through this difficult time.  They may be able to provide you with advice that you were not aware or resources that you did not know were available.

Consider what your options and make sure that you do not fall into the trap of thinking that you have no choice at all.

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