What Is A Short Sale?
What is a Short-Sale? A Shot Sale is a mortgage that is upside-down in equity, and referred to as “being underwater”. However, there’s nothing short about a Short sale, especially the time it takes to resolve. To understand this, let’s first discuss why someone would need a Short Sale in the first place. Let’s say that things are going just peachy for you and your spouse. Although it may take two incomes to make “ends meet”, you’re able to cover your financial responsibilities and still have a little bit to put away. Suddenly one of you loses their job or gets a life-changing illness, making them unable to work. These are considered to be “hardships” in an otherwise normal situation. It often leaves one wondering; what happened? How did we end up here?
Many homeowners in situations like this, overwhelmingly try to make “ends meet” on a single income, where before it took two. Unfortunately …this is known as “Pride & Denial”. Pride because we’ve worked hard for what we have, and denial because it just couldn’t happen to us, right? After all, what would our family and friends say & think of us? Falling behind on the mortgage and unable to “catch-up”, bill collectors calling at all hours, threatening letters in the mail, and now… facing the real possibility of Foreclosure.
This is a crisis that first hit millions of homeowners back in 2006. Now in 2020-2021, millions of homeowners are in this very situation again. The possibility of losing one’s home, becoming “homeless” in a sense, has affected many families around the nation. While one may not want to sell their home, the inability of making the mortgage makes it almost a necessity. However, trying to sell a house in a “downmarket” or when more is owed than the property is worth is hard enough for a professional who does this every day for a living, you can imagine how much harder it would be for someone doing it alone?
So, what is a Short Sale and what does it have to do with me, right? A Short Sale becomes necessary when a homeowner needs to sell in order to avoid a foreclosure. However, because more is owed on the mortgage than the home is worth, the lender who gave the loan has to approve the short-fall they are willing to accept if the home is sold. A couple of things to keep in mind; there are strict rules that apply if this route is taken. The process has to be handled by a licensed Realtor, preferably one who has the experience and understands the process of dealing with a Short Sale.