Short sales allow a homeowner to close on the sale of property when it is worth less than the debts secured by it. Typically, the lender agrees to accept the net proceeds from a closing in exchange for releasing its lien. Lenders are not agreeing to a short sale to be generous, they are convinced that it will come out better than it would by foreclosing on the home and pursuing the borrower for its losses.
While the procedures for a short sale will vary from lender to lender, most lenders need to be convinced of the following:
The Sales Price Is Not Too Low
The sales price of contract is equal to what they would be able to sell the property for after a foreclosure. While the lender may review the market analysis provided by the agent, they will often confirm the market analysis by contacting its own sources, such as an appraiser.
All Costs Associated With The Sale
The commission for the transaction is equal to the commission it would pay its agent for selling the home after foreclosure. The lender will need to know as precisely as possible the amount of proceeds it can expect to receive from the sale.
A Good Reason They Should Accept It
The lender will want an explanation of the circumstances, which caused short sale in the first place. These usually include death, medical problems, divorce, loss of a job, or a job displacement requiring a move.
A Financial Package On The Seller
The seller doesn't have the resources to make up the mortgage shortfall on their own. The lender will require a full assessment of the financial condition of the seller. Financial statements, income and expenses, tax returns and the seller's paycheck stubs should be provided. The seller's financial condition is a tricky proposition. While the lender will be reluctant to approve a compromise without reviewing strength of the seller, this information will help the lender in pursuing the seller for a post-foreclosure deficiency if the short sale does not take place.
So What Is The Risk?
A seller with few assets, little or no income, and a willingness to file bankruptcy has little to lose by providing this information. Those with other assets, a good job with garnishable wages, or a desire to avoid bankruptcy will put themselves at risk in the process. Those considering a short sale need expert legal advice regarding the wisdom of submitting financial information to the lender.
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158 Middleton Drive
Goose Creek, SC 29445
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Residential
MLS# 24010557 / Active
Enjoy all the conveniences of ranch-style living in the single-story Beech home. Enter this inviting and spacious front entry with guest and second...
102 Ashton Drive
Goose Creek, SC 29445
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Sullivans Island, SC 29482
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MLS# 24010551 / Active
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3837 Delinger Drive
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Enjoy this comfortable two bedroom, two bathroom located in Turtle Cove! This is a an original owner villa that has been well maintained and cared ...
769 Catawba Road
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MLS# 24010547 / Active
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MLS# 24010543 / Active
This home is in highly desirable Brickyard Plantation conveniently located south of Hwy 41 in the middle of Mount Pleasant. Many upgrades and updat...
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Set upon a sprawling 19 acres, this idyllic Johns Island home provides the perfect country respite only 15 minutes from downtown Charleston. The fi...
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MLS# 24010540 / Active
This beautiful home is nestled in the neighborhood of Drakesborough. Picture yourself sitting on a rocking chair on the front porch, drinking your ...
154 Middleton Drive
Goose Creek, SC 29445
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MLS# 24010539 / Active
The Ivy is a two-story, single-family home featuring a formal dining room as you enter, which then opens to the great room and kitchen creating a f...
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North Charleston, SC 29405
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MLS# 24010538 / Active
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9412 Sun Fountain Drive
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498 Albemarle Road UNIT #208
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Summerville, SC 29485
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MLS# 24010529 / Active
This charming one story home is only minutes to Downtown Summerville and convenient to shopping & restaurants plus sough after Dorchester 2 school ...
2326 Old Highway 6
Cross, SC 29436
Cross Area (west)
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MLS# 24010528 / Active
This cozy home is nestled on a large 1-acre lot in an HOA free area! Picture yourself sitting on the front porch in a rocking chair, enjoying the c...
475 Spanish Wells Road
Summerville, SC 29486
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