If you are facing the loss of your home due to an adjustable rate mortgage, a job loss or other financial difficulty then you should know that you do have another option. But it is important that you contact your lender as soon as you begin having financial issues. Letting them know that you are trying to resolve the issue is important because you will need their cooperation to be able to complete a short sale of the property.
A short sale is a process that the homeowner initiates when they are in financial distress, meaning they are unable to pay their mortgage. The homeowner lists the home for sale and also notifies the lender that they are selling but that the sale price of the home might not be as much as the remaining balance of the mortgage. The homeowner then requests that the bank accept the lower amount as full payment for their mortgage. In some cases the bank will take the lower dollar amount and forgive the remaining balance on the mortgage. In other cases the seller is required to sign a promissory note and repay the lender the remaining balance.
The actual sale process for the home is not quite like a conventional sale. When an offer comes in on the property, the seller does not get to accept, decline or counter offer. The lender is the one who gets to make that decision. They also will then decide if that is going to be accepted as payment in full or not. So the process can take longer than a conventional sale. But buyers are willing to wait for the banks approval to purchase a home at a great price.
Because the bank must agree to the terms of the short sale and cooperate with the homeowner for this process to work, you can see why being honest with the lender from the first sign of a financial issue is important. The bank is actually not interested in taking possession of a property by foreclosing unless all other options have been exhausted. It only costs the bank more money to try to maintain and market the property to recover their bad investment. So they do have a vested interest in seeing a homeowner process a short sale.
If you have questions about the short sale process or any part of a real estate transaction then visit our site to learn how we can buy your Scottsdale, AZ house cash and help you avoid the short sale process.