Homeowner Short Sale Information

No one wants to sell their home when that was not in the plan for the property. Homeowners should consider listing their property for sale when it is initially realized that a financial situation will not correct itself within a very short period of time. This could be due to unemployment, divorce, extended illness or death. If your lender’s loss mitigation unit was unable to assist you in keeping your home with another loss mitigation option such as a loan modification; it is now time to attempt the sale of the property to avoid a foreclosure sale that can devastate credit and even cause embarrassment with friends and family since this is a publicly published event in your area.

A short sale occurs when the property’s value has not increased or has declined and you have only had your loan for a few years. If you have gotten behind in your mortgage payments, the debt owed on the loan continues to increase due to unpaid interest on the loan along with possible foreclosure attorney’s fees and costs. An example would be that you have an unpaid principal balance that is $250,000.00 but your homes value is only at $240,000.00 now. This is when a short sale needs to be considered.

If you already realize that the sale of the property will not generate enough money to pay off your existing mortgage debt, you then only have three options;

• One – sell the property and pay the difference in cash at the closing.
  
• Two – do nothing and allow the property go to foreclosure. The lender will then go
  through the process of auctioning off the property to a bidder at the foreclosure sale.
  If no one buys it at the auction, the lender will then proceed to eviction so they can
  sell the property due to non-payment of the debt.
  
• Three – sell the property and pursue the short sale approval through your lender.
  
  

FIGURE OUT THE TRUE VALUE OF YOUR PROPERTY
Many times a real estate agent can provide you with a market analysis and give you a good idea of what your home might sell for. You can also use the real estate related websites that might give you an estimate of value based on a property in excellent condition. Keep in mind that your home’s value may be decreasing in today’s market and that this estimated value does not include the costs to you to sell your home.

CALCULATE YOUR EQUITY
Should you use a real estate professional to provide you with a market analysis, also request they provide you with the estimated amount that it will cost you to sell your home (commissions and seller closing costs). Once that figure is provided, use this formula:

• Estimated sale price minus estimated cost of sale
= net sales proceeds.

• Net sales proceeds minus full mortgage payoff
= equity/negative equity.

FIND A BUYER
It is possible to reduce the amount it costs charged to a property owner by selling a property by owner. This is never a recommended course of action due to all the expertise for selling property that is required. Every area in the country has different requirements that must be met when selling a home. Unless your buyer is a real estate professional themselves, you will always have a faster and better result using the right real estate professional to help you find a buyer.

PMH FINANCIAL CAN HELP YOU
with no out of pocket cost to you, the homeowner. If you would like PMH Financial to help you
locate a qualified real estate professional to list your home for sale, please click here.