A short sale is one way to getting out of foreclosure in Cleveland, Ohio. A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property; the property owner cannot afford to repay the liens’ full amounts and the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt.
When negotiating a short sale with your lender, you as a seller may be able to negotiate a price below the outstanding balance of the seller’s mortgage(s). As stated above, due to the circumstances of the bank and/or the lender, a seller may compromise to a level where they can negotiate a price below the outstanding balance.
Getting an attorney or a real estate professional is advisable when doing a short sale. I know it may seem unreasonable to seek professional service, especially when the money is tight. However, in the long run it is very beneficial to go through a professional with your sale. If the money is not there to pay the attorney or agent upfront, discuss other payment options like paying them out of the proceeds of the sale. The agents and attorneys have more networks that can facilitate a quicker sale, thus saving you loads of precious time and money too.
Generally, lenders will not consider a short sale if payments are current. The next question is: “Why are you late on payments?” Your reason for being late may lead to the next questions, which need to be proven to the lien holder.
This means that you are possibly underwater, or you owe more than you can sell your home for. Comparable sales must be shown to prove that your home value is less than your mortgage balance.
The seller must prove that he is having a hard time and that this is the reason why he cannot pay the debts due. Hardships here include mortgage adjustments, job loss or curtailment of employment, failed business, and/or excessive debts.
Insolvency means that your total liabilities exceed your total assets. This means having a negative net asset and the inability to pay debts as they fall due. The bank will want to see that you don’t have cash to pay your mortgage.
A homeowner is not always fitted for a short sale, but if you answered yes to a few of these questions most likely you can consider it as an exit strategy.
Talk to you soon!