Upside Down Short Sale Cake
- Date: 2007-10-24 - Word Count: 451
Share This!
There's a whole slew of ominous terms being bandied about these days when people talk real estate. With some northern US towns hit so hard by the housing downturn that over 30% of their houses are empty, the increase in anxiety is no great wonder. But homeowners need not panic, there are alternatives to foreclosure.
Getting in over your head financially doesn't have to mean walking away from your home investment. As a first step, you should always try to work things out with your bank. Contact them as soon as you're having trouble with your payments. Banks don't like foreclosures and you may be able to make a deal that will make your payments bearable and allow you to keep your home. There are also some programs though HUD that can help you stay put until the market balances out.
Of course working out a deal isn't always possible but saving your credit rating is. Once you've exhausted your options, you may want to try to negotiate a short sale.
WHAT IS A SHORT SALE?
When your home is worth less than its mortgage ti's known as an upside down mortgage. When a lender agrees to absorb the difference in a sale, it's called a short sale. Like a last exit before foreclosure, short selling your home won't make you any money but when your debt is more than you can handle, negotiating a short-sale may rescue your credit rating and let you avoid the embarrassment of foreclosing.
In order to qualify for a short sale:
1. Your loan must be in default at least two months
2. Your house must be worth at least 63 percent of what you owe and sell for at least 82 percent of the "as-is" appraised value.
3. You must sell the house within three to five months
4. You must convince your lender to assume the cost of the short sale:
THE COST OF SELLING = Real estate commissions + Taxes + Closing costs + Title fees + Liens of record + Balance of all loans on the home including interest and late fees
THE COST OF THE SHORT SALE = Cost of selling - Appraised value
Once these figures are delivered to the bank, the lender can take up to 45 days to balance the cost of the short sale against the cost of a foreclosure. Not every lender will agree to a short sale though, which is why hiring a realtor may be the best way to negotiate this kind of deal. Contact a realtor in your area that's experienced in negotiating this type of arrangement. They may have more leverage with lenders and be able to guide you through the process. They will also be able to help you find a buyer.
Getting in over your head financially doesn't have to mean walking away from your home investment. As a first step, you should always try to work things out with your bank. Contact them as soon as you're having trouble with your payments. Banks don't like foreclosures and you may be able to make a deal that will make your payments bearable and allow you to keep your home. There are also some programs though HUD that can help you stay put until the market balances out.
Of course working out a deal isn't always possible but saving your credit rating is. Once you've exhausted your options, you may want to try to negotiate a short sale.
WHAT IS A SHORT SALE?
When your home is worth less than its mortgage ti's known as an upside down mortgage. When a lender agrees to absorb the difference in a sale, it's called a short sale. Like a last exit before foreclosure, short selling your home won't make you any money but when your debt is more than you can handle, negotiating a short-sale may rescue your credit rating and let you avoid the embarrassment of foreclosing.
In order to qualify for a short sale:
1. Your loan must be in default at least two months
2. Your house must be worth at least 63 percent of what you owe and sell for at least 82 percent of the "as-is" appraised value.
3. You must sell the house within three to five months
4. You must convince your lender to assume the cost of the short sale:
THE COST OF SELLING = Real estate commissions + Taxes + Closing costs + Title fees + Liens of record + Balance of all loans on the home including interest and late fees
THE COST OF THE SHORT SALE = Cost of selling - Appraised value
Once these figures are delivered to the bank, the lender can take up to 45 days to balance the cost of the short sale against the cost of a foreclosure. Not every lender will agree to a short sale though, which is why hiring a realtor may be the best way to negotiate this kind of deal. Contact a realtor in your area that's experienced in negotiating this type of arrangement. They may have more leverage with lenders and be able to guide you through the process. They will also be able to help you find a buyer.
Related Tags: home selling, real estate sales, short sales, home marketing
Melissa O'Connell is a licensed Scottsdale real estate broker and Scottsdale resident with 15 years experience buying and selling Arizona Real Estate. Call her at 877.451.0748 or visit www.uniquescottsdalehomes.com for more information. Your Article Search Directory : Find in Articles
Recent articles in this category:
- 5 Reasons to Buy Jasper Real Estate
Jasper is a small town in North Georgia and it is growing rapidly. Since North Georgia Foreclosures - Ellijay Real Estate
Ellijay Georgia has always been known for it's outdoor activities and seasonal festivals. Downtown E - How to Deal With Blocked Drains
A blocked drain is an occurrence that happens eventually to all households. You may have experienced - The Benefits of Hiring a Plumbing Consultant
Your dream home may not always be brand new, with fresh paint and home essentials. There are certain - The Worst Mistake You Can Make When You Apply to Rent a Home
A whole new class of people has become renters and potential renters in America during the last thre - State of Individual Real Estate Markets
Everybody is well aware of the hit that the real estate market has taken over the past three years. - Thoughts on Avoiding the Landlord Trap
I've heard several people say they would never invest in a multifamily rental property because they - An Idea to Increase the Bottom Line of Your Investment Property
Are you pretty sure that you've already maximized the income coming from your property? If you've cl - Finding the Value of a Piece of Investment Real Estate
There is a lot of confusion about how much investment property is really worth. We'll look at three - Arkansas Land For Sale - Search Engine Optimization and Your Website
If you have Arkansas land for sale and are interested in advertising it on your website I have a few
Most viewed articles in this category:
- How High Did Home Prices Really Go
The U.S. Census Bureau released data on Tuesday that revealed where the nation's hottest markets wer - New Homeowners Tips for Household Safety
With so many items on their ¡°buying a home¡± checklist, few homeowners take into considerati - Truth About VA Foreclosures
Many people now days are finding themselves out of work and not being able to make the mortgage paym - Avoid Rookie Real Estate Investing Mistakes
When Robert Kiyosaki, author of the Rich Dad book series, bought his first property he was, of cours - Finding The Perfect Roommate On Craigslist
Craigslist, Roommates, and The Concerns Craigslist is "great" when it comes to looking for housing - The Forgotten Secret To Selling Property - Simple, Quick And Cheap
Why spend big dollars trying to get people to drive a long way to see your house, when your best pro - Get Amazing Results Selling Real Estate Online
This is the age of the internet. Why not take advantage of the widespread use of the internet to ad - Dallas Real Estate Information
In the United States, Dallas is considered as the second leading state according to the area. If any - The Largest Private Equity Indian Real Estate Deal
In the largest private equity deal won by the real estate sector, Morgan Stanley Real Estate has inv - Fractional Real Estate Ownership
Fractional ownership of vacation ski condos is growing in popularity. Park City Utah a popular ski t