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What is a Short Sale?
A short sale is when a lender accepts a discount on a mortgage to avoid a possible foreclosure auction or bankruptcy. Instead of buying from a seller, the buyer is purchasing the property directly from the lender for a discount. For example: A homeowner, who is facing foreclosure, has an existing first mortgage of $300,000. Buyer writes an offer to the lender for $260,000, which is accepted as full payment for the loan. This is a short sale. Why are they willing to take such a discount? Several reasons. First of all, banks do not like excess inventory and bad loans on their books; therefore, if they see an opportunity where they can sell the property without a huge loss, they will do it. Secondly, lenders know they could lose a lot more money if the property goes to Foreclosure auction. There are so many fees involved if the property goes to auction, that they would be better off taking the discount beforehand and be finished with the headache of it all.
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Please contact Scott to be notified of new properties. A website will be created specifically for you to monitor the market for your next property.
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Friends do not let Friends get Foreclosed If someone you know is behind on their mortgage payments please have them contact Scott Real Estate to do what is called a short sale. |
How does a short sale work |
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The first thing the borrower should do when they can no longer afford a property is to contact the lender immediately. The last thing a lender wants to do is foreclose on the property. Lenders typically have departments that work with people who are behind on their payments to resolve the situation. If you cannot resolve the default with the lender, and you want to see if they will accept a short sale, they will direct you to the department that handles short sales.
The lender will usually require the borrower to submit a lot of information to the lender in order to consider the short sale. The information required may include:
• Income documentation such as W-2s and pay check stubs to verify the borrowers’ income.
• Bank statements to verify the borrowers’ assets
• Hardship letter – this letter will describe for the lender the reasons the borrowers are in the financial position they are in and will ask the lender to accept the short sale. Borrowers should make this letter sound as sad as possible and back up the story with any documentation you may have such as medical bills, etc.
• Fair market value for the property – depending on the lender they may require an appraisal or may accept an opinion from a local Realtor know as a Comparative Market Analysis (CMA).
• Preliminary proceeds sheet from the sale of the property. This will show the proceeds of the sale of the property after the mortgage is paid off and all other closing costs and fees are paid. This will be negative in the case of the short sale and this negative amount is the amount of the shortage.
• Listing agreement from Scott Real Estate and a purchase contract when it is available.
When the lender reviews all of this they may or may not approve the short sale. If they do not approve the short sale they will proceed with the foreclosure. If they do agree to the short sale you will close on the sale of your property and the lender will normally take the loss. |
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Scott Real Estate also specializes in REO and Investor owned properties, Relocation properties, and Foreclosure properties. Companies in need of moving properties only need to email Scott at: Scott@SaveWithScott.com and their properties can be on the market immediately. |
Additional Services offered for properties
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Many Companies need a turnkey solution to their REO, relocation, and foreclosure properties and Scott Real Estate is here to deliver. In addition to the sale of the property, minor details like the following can be arranged.
Re-Key
Emailing BPO and Pictures
Repairs
Marketing
Clean out/Removal of anything left behind.
Thorough Cleaning
Painting and Carpentry
Carpet
Mowing and/or landscaping
A/C
and most likely anything else that may come up.
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Whether you are planning to buy your first home or sell your existing home, contact us today!
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Homes with Investment potential
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At any given time, I will usually have Homes with good investment potential
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Bedford
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Keller
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Other North Texas areas available |
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