A  short sale is the sale of a property for less than what the owner still  owes on the mortgage. A short sale is an alternative to foreclosure  when a homeowner needs to sell and can no longer afford to make their mortgage payments. The lender agrees to accept less than the amount owed  to pay off a loan now rather than taking the property back by  foreclosure and trying to sell it later. Lenders agree to a short sale  because they believe it will net them more money than going forward with  a lengthy and costly foreclosure process. 

Can I Do a Short Sale?

A short sale is an alternative to foreclosure and may be an option if: 

  • You are ineligible to refinance or modify your mortgage
  • You are facing a long-term hardship
  • You are behind on your mortgage payments
  • You owe more on your home than it’s worth
  • You have not been able to sell your home at a price that covers what you still owe on your mortgage
  • You can no longer afford your home and are ready or need to leave

Don’t just walk away from your home.

 There are better options. The most important thing is to avoid   foreclosure—and options may be available to assist you if you are ready   to leave your home. Some options may even offer cash incentives to  help  you move and transition into different housing. Now’s the time to  take  action before it’s too late.   

A  foreclosure is the legal process where your mortgage company  obtains  ownership of your home (i.e., repossess the property). A  foreclosure  occurs when the homeowner has failed to make payments and  has defaulted  or violated the terms of their mortgage loan. A foreclosure can usually  be avoided—even if you already received a  foreclosure notice. See the  chart (in "Foreclosure Comparison") to  compare some other options:  Short Sale and Mortgage Release  (Deed-in-Lieu of Foreclosure). No  matter the option, you must take  action as soon as you can. 

A foreclosure can result in you:  

  • Owing the mortgage company the deficiency balance of your mortgage (the deficiency balance is the remaining total mortgage  balance  after the sale price of the home).
  • Lengthening the time you could receive a mortgage to purchase your next home to at least 7 years.
What are the benefits?            

Some benefits of pursuing a short sale option are:

  • Eliminate or reduce your mortgage debt.
  • Avoid the negative impact of foreclosure.
  • May be eligible for up to $3k in relocation assistance in some cases.
  • Start repairing your credit sooner than if you went through a foreclosure.
  • May be able to get a Fannie Mae mortgage to purchase a home sooner   (in as little as 2 years) than if you went through foreclosure (up to 7 years).
   What is the process?                

If  you qualify for this option, the process is similar to a normal  real  estate sales transaction. You will work with a real estate agent to   market and sell your home. However, your mortgage company will also be   working with you and your real estate agent every step of the way to:  

  • set the sale price (based on current market value),
  • collect financial information and negotiate with other lien holders (i.e., your second mortgage company) if applicable,
  • review acceptable offers,
  • agree to the terms of the sale once a buyer is in place, and work with the buyer’s real estate agent and mortgage lender to finalize the sale.  
   What are my options?               

Homeowners  who are struggling with their mortgage payments are facing  tough  choices—do you stay in a home you may no longer be able to afford  or  should you try to leave? While it may be difficult to think about  leaving your home and making this decision, it may be the best option  if  other solutions to keep you in your home are no longer viable.  

In some cases, you may be eligible to  receive relocation  assistance to use toward your moving expenses and to  make the transition  to new housing easier. A short sale may take up to  120 days, but this could be shorter or longer depending upon your  specific situation.  

Sherri L. Parsons

Virginia License Number 0225226975 Mobile: 757-744-9267

Parsons Real Estate Team w/ 1st Class Real Estate

921 Battlefield Blvd.
Chesapeake, VA 23320

Contact Me Today

Let's find you the right home at the right price.