Wednesday, November 24, 2021

How Do I Complete a Short Sale?

If your home is at risk of going into foreclosure, you may be able to avoid foreclosure by moving forward with a short sale. There are other options for avoiding foreclosure that may be available to you as well, but a short sale can allow you to sell your house and move on, ideally without owing anything to the bank in the future. Short sales are particularly helpful for homeowners who are struggling with underwater mortgages. While the real estate market remains a seller’s market in many parts of the country, anyone who purchased a home at the peak of the real estate market may be struggling to make payments on a property for which they paid a significant amount of money and for which the property would be likely to sell for a lesser amount in the present. For these homeowners, a short sale may be the best option.

If you are considering a short sale, how can you complete this process? Our Oak Park foreclosure defense lawyers can provide you with the information you need.

Learn About Short Sales

The first step in completing a short sale is to learn more about the process and what it entails. As a Bank Rate article explains, a short sale is the sale of a property that occurs “when a lender agrees to accept a mortgage payoff amount less than what is owed in order to facilitate a sale of the property by a financially distressed owner.” Then, in most short sales, the owner enters into an agreement with the lender that it will forgive any amount remaining on the mortgage so that the owner can walk away without owing the bank any additional money.

To clarify, let us give you an example: A homeowner purchased a property for $500,000 and has a mortgage payment of approximately $2,400 per month. The homeowner is struggling to make that monthly mortgage payment and is behind on the loan by numerous months of payments. The homeowner wants to avoid a foreclosure, but the property has recently been appraised at only $300,000, and the homeowner still owes $400,000 on the original loan. With a short sale, the bank can agree to accept $300,000 and to forgive the remaining $100,000 the homeowner owes on the loan.

Work With an Attorney to Obtain Approval From Your Lender

Once you understand how the short sale process works, you can begin by working with your foreclosure defense attorney to obtain approval from your lender to complete a short sale. Once your lender approves, then you can move forward by listing the property as a short sale with a real estate agent who has experience handling short sale properties.

Get an Offer

Next, you will need to find a buyer who is interested in the property and who makes an offer. Properties that are sold as short sales are sold on an as-is basis, so some homebuyers may not be interested in making an offer or may not be able to secure funding to purchase the property.

Present the Offer to the Lender

Once you have an offer, you will need to submit the information to the lender, who will need to approve of the sale price and the other aspects of the sale.

Contact an Oak Park Foreclosure Defense Attorney

If you have questions about completing a short sale to avoid foreclosure, an Oak Park foreclosure defense lawyer at our firm can assist you. Contact the Emerson Law Firm today.

See Related Blog Posts:

Benefits of a Short Sale Instead of Foreclosure

Short Sale or Chapter 7 Bankruptcy?