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Friday, September 09, 2011

Short Sales – Hardship Based not Market Based

A short sale is a situation where a homeowner is selling a property for less than the mortgage monies owed.  In a short sale the seller can not derive any proceeds from the sale.

After a seller receives and accepts a favorable offer, the offer to purchase must then be sent to the mortgage lender because.....Short sale approval depends on the lender – period. 

A seller who is attempting a short sale will likely have to demonstrate (and document) a legitimate hardshipnot just the loss in market value.  Although I read on one attorney's website that if your home's value has drastically declined, continuing to pay off the mortgage may amount to throwing money away or something to that effect.

[I am not offering legal advice as I am not an attorney.]

What constitutes a hardship will depend on the lender but, in my opinion, I think things like
  • a long term job transfer, 
  • loss of employment, 
  • a death in the family, 
  • major illness of mortgagor, 
  • loss of income (reduced salary), 
  • excessive obligations, 
  • incarceration…well you get the picture.   
Short sales involve a "need to sell" rather than a “want to sell.”
And, if approved, what will come of the difference between selling price and mortgage amount?  It all depends on the lender.  The good news is a short sale will result in less damage to your credit than a foreclosure.

Viera and Rockledge, Florida homeowners, call me at 321-693-3850 if you are in a situation where a short sale might be appropriate. 

If you prefer email me with any questions you may have about short sales in Brevard County, Florida.



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