Short Selling | What is it?
Often the only method of selling a house with little or no equity and preventing a probable foreclosure is by short selling the home to an investor or end buyer. A Short Sale typically entails an investor buyer working with the homeowner to negotiate with the homeowners mortgage lender. The objective of these negotiations is to postpone a pending auction and negotiate a discounted payoff on the loan or loans. Utilizing this approach the property can be bought at a somewhat reduced price and a foreclosure may be avoided.
Short Selling Example
After the loan is negotiated the home can be sold for anywhere from $180,000 to $200,000 with no foreclosure and no additional cost to the homeowner.
The benefit to a short sale is that it may well be the ONLY approach to sell a house where the loans add up to a lot more than the house is worth. And it is the most effective method to prevent a foreclosure.
The disadvantage to a short sale is that like everything, it does affect a homeowners credit. A short sale is simply better than a bankruptcy and a lot a lot much greater than a foreclosure the Atomic Bomb of credit scars.
Short sales are highly complex negotiations that take significant time paperwork and expertise. They are among the most complex transactions in real estate. Additionally it can take from 2-4 months or far more to negotiate with the sellers lender.
Through my short selling business I have completed over 1000 short sale transactions and have achieved a very high success rate due to my detailed processes and experience. If you are considering short selling your home or short sales as an investment strategy please contact me I would be glad to assist you either way
Common Short Selling Questions
Can I do a short sale myself?
No. A lender will need a purchase offer before considering negotiating a short sale. The offer must be real and be combined with a Proof of Funds letter from the investor buyer. Additionally the the lending company will want a great deal of documentation from the homeowner. An investor who is performed a lot of of these, like myself can assist you through every last short sale hurdle.
Will a short sale hurt my credit?
Everything you do affects your credit to different degrees. In order for a lender to think about approving a short sale on a loan the loan will need to be non performing. To put it differently the homeowner must be behind on payments. Once the short sale is approved the mortgage bank will charge off a portion of the loan which also affects the homeowner is credit. The main benefit would be that the house can be sold and that a foreclosure and its legal ramifications might be avoided. Most specialists acknowledge that a foreclosure is the worst thing that can happen to your credit.
Phill Grove has conducted approximately $200M in real estate transactions – using non-traditional investing methods such as mortgage assignment, short sales, equity partnering, auction-options, wraps, swaps, and other methods – many of which he invented and/or pioneered for the industry. Phill has invented a new strategy called the Mortgage Assignment Profits System. Phill Grove has personally trained and coached hundreds of Real Estate Investors on the "12 Ways to Buy and Sell Real Estate", as well as marketing and lead processing strategies that actually work. Find out more about Phill at http://www.REIMaverick.com