Real Estate Short Sale

A real estate short sale, or pre foreclosure sale is when a homeowner sells their home for less than the outstanding amount of their mortgage loan, during the pre-foreclosure period.

Banks allow 3 to 5 months usually to allow a homeowner to attempt to sell their home. There are specific requirements that need to be met before a homeowner can sell short. A pre-foreclosure sale must be agreed to by the bank, as they are going to lose money in the deal. Usually a bank will consider a short sale as this is less costly to them than foreclosure.

Do you qualify for a short sale?

• Your property's value must have dropped.

• You are not allowed to own other valuable property that can be used as collateral.

• You must prove that your circumstances have changed for the worse which means that you can no longer service your mortgage loan.

• Your appraised value of the property should be no less than 70% of the mortgage loan.

• The sale price is not allowed to be less than 95% of the appraised value.

• You must be at least 2 months in arrears on mortgage repayments.

• You must be able to sell your home within a 3 to 5 month period (this time is allotted by the lender, and can very from lender to lender).

Benefits

What if you don't qualify?

Then unless you can make up the arrears on your mortgage payments, you are going to be headed for foreclosure.

What are your options now?

Either catch up your arrears or foreclosure or bankruptcy.

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