For many sellers today that still seems to be the question. With the market rebounding and housing prices going up many buyers are considering whether now is the best time to short sale their home to get out from negative equity and lofty mortgage payments.
Short sales occur when a homeowner wishes to sell their home which has a mortgage against it greater than the market value of the home. The owner of the home has a Realtor do a market evaluation establishing the marketable price of the home. Then lists the home for sale even though the price is less than what is owed. In many cases the seller of the home has discontinued making the loan payments on the home. Either way when a buyer is found the sale can only take place when the lien holder (the mortgage holder) reviews and approves the sales price.
This can be a lengthy process spanning from a few weeks to a few months depending on the bank, the property, and the numerous of liens against the property. Many times sellers find this process a little cumbersome to accomplish on their own, due to the continuous need for updated paperwork and correspondences between the banks, escrow, sellers and buyers. However, having a knowledgeable Realtor in your corner will make the negotiation process much less stressful, acting as a liaison between the bank and seller. In most cases the lender will accept the market value as the sales price and forgive the balance of the debt as a market loss. The short sale seller then can then move on to closing with escrow using the sales amount the bank has approved and the excess debt is forgiven.
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