A short sale can be a great way to get an amazing deal on a property. A short sale happens when the lender is open to accepting less than what’s still owed on a mortgage. A short sale can occur when the homeowner or property owner has fallen seriously behind in making payments. If the housing market is down, and the home’s value is below the remaining mortgage balance, the lender and homeowner may try a short sale to avoid foreclosure.
There is a lot of confusion surrounding the short sale process, but it doesn’t have to be complicated. Our team at Liberty Title has put together this guide to explain what you need to know about short sales.
For a homeowner who has fallen behind on their mortgage payments, the worry of losing their home can be looming. But if their home is underwater, meaning the balance on the mortgage exceeds the home’s value, they may be forced to part with their home regardless. They may choose a short sale to avoid the fallout of a foreclosure.
Homeowners choose a short sale to avoid these problems:
● Having to wait 3-5 years to purchase another home
● Seven years of damage on their credit record
● A hundred-point drop on their FICO score
● Credit limit decreases
● Higher insurance premiums
How a Short Sale Works
During a short sale, the owner of the home will usually put the home up for sale. The short sale’s approval is contingent upon the lender agreeing to it. The lender’s role can add an extra layer of complications to the short sale process even if the new buyer and the homeowner selling the property agree to the sale terms. That’s why it’s important to have an experienced closing team that understands the short sale process and can help.
Minnesota Short Sale Closing Process
A short sale can be an incredible opportunity. It helps the previous owner to avoid a credit dilemma and gives you a chance to get a great deal on a property at more than 20% less than its value.
That’s why it’s important to have a strong team behind you to walk you through the process. At Liberty Title, we offer in-house legal services, in-house abstracting, and title insurance to streamline your short sale. Call us at 763.494.0340 to discuss your short sale, or contact us to learn more.