Owing more than your home is worth in today’s Crofton real estate market is just one of the factors determining whether a lender will approve your short sale. That alone is not enough to qualify for a short sale.
According to America's Home Rescue, you must first be able to satisfy your lender(s) regarding these three factors before most lenders will consider your short sale application:
1. You are behind in your mortgage payments.
2. You have a genuine hardship.
3. You have no equity in the property.
In fact, some lenders have a much longer list and they all require a lot of supporting documentation. On the flip side, some lenders are flexible about these three factors.
Please don’t stop making payments on your home just to qualify for a short sale. The fact is that you’re probably already behind if you do have a qualifying hardship.
You will have to jump through a whole bunch of hoops with your lender, even if you do meet this basic test – and the process will be different, depending on what kind of loan you have. If you owe more than you can get for selling your home, ask your prospective real estate agent if they know the process for short-selling a home with YOUR loan type and/or YOUR combination of first and second trust. (If they know, they’ll be able to explain the difference between your loan type and another.)
Finding a buyer for your Crofton home may not solve your problem. If your agent doesn’t really know the short-sale process, he/she may give you well-intentioned but wrong advice on what is or is not an acceptable short sale offer from your lender's perspective. After weeks or months of uncertainty, your buyer could withdraw or your short-sale application could be turned down and you could lose your home to foreclosure.
If there was ever a time in your life to choose the most experienced real estate agent instead of the cheapest, this is it.
Selling short may not be an option for you, so you need to know “up front” what your chances are of qualifying for a short-sale, what the process is (and follow it!), and what other alternatives there are for dealing with the “under-water” or “upside down” loan on your Crofton home.
Copyright 2010. All rights reserved.
For answers to your real estate questions about Bowie, Crofton, Davidsonville, Fort Meade, Gambrills, Odenton and other communities in Anne Arundel County, Maryland, contact Margaret Woda at Long & Foster Real Estate, Inc. or simply click on a button below for information you can review online at your own pace:
Hi Margaret! Great information for those who are in distress with their homes. One point that you made--don't stop making your payments is VERY important and many think that they must miss payments in order to be considered for a short sale and that is not true. There are about 10 qualifying hardship factors and you're right--you don't have to be behind on your payments if you have one or more of the other qualifiers.
Have a wonderful Sunday...
Margaret, this is such a great post. It is so important that people who are in trouble with their home, can't make the payments, upside down in their mortgage, it is imperative that they choose a realtor who actually knows what the heck they are doing!
Margaret-so many people think it is only about the payments and not about the "total package." Finding an agent who can ask the right questions is critical.