Most of us in the real estate business (and probably most people in America) didn’t know what the term “short sale” meant 2 years ago. Now it is a topic that appears in our business on a daily basis, and we are all working hard to stay up to date with the latest information to help our clients.
A short sale is an agreement from your lender to accept less than the amount you owe on your mortgage and release the lien on your property so you are able to sell it and move on. The short sale process can take, on average, 4-6 months and requires a lot of patience, but there are steps that can be taken to make the process easier.
If you are a seller and you have fallen behind on your mortgage payments, tell your Realtor right away. As with all real estate transactions, it is important to work with someone who knows and understands the process. Your Colorado Landmark Realtor can give you a checklist of the items that should be completed and submitted to the bank upon listing your home. Once you receive an offer on your property, your Realtor will help you submit it to the lender along with other required documentation to help facilitate the sale as quickly as possible.
By the time they have reached the point of becoming delinquent with their mortgage payments, many sellers are tempted to just walk away from their mortgage and allow the bank to foreclose on their property. There are several reasons why this is a bad idea.
- A foreclosure can negatively impact your credit score by 250 – 300 points, and it will remain on your credit history for up to 10 years.
- A homeowner who has had a foreclosure is ineligible for a Fannie Mae backed mortgage for a period of up to 5 years, and has to disclose a foreclosure in the last 7 years on any loan applications.
- Having a foreclosure on your credit history can make it difficult for you to qualify for any other type of loan, and some employers will even use this information to re-assign or terminate employees.
Instead, if you take the time and effort to get your house sold through a short sale, it will most likely impact your credit score by only 50 or so points, and you are able to qualify for a mortgage and purchase another home after only 2 years. Not to mention that you can sell your home and move out of your neighborhood with dignity, and feel as though you did everything you could to protect your family’s future.
If you are a buyer and you are interested in purchasing a property that is being sold as a short sale, you will also need to be patient. It is important to work with a buyers agent who has experience with short sales. New post coming soon: tips for buyers interested in short sale properties!
The short sale process can be stressful and frustrating, but working with an experienced agent will make it much easier for you every step of the way. At Colorado Landmark our real estate sales associates strive to be up to date on the latest real estate trends and market information. Our sales associates regularly pursue continuing education opportunities to reinforce their expertise and knowledge. If you have any questions or are ready to sell your home, please give us a call.
Jennifer Fly, Broker Associate, Colorado Landmark Realtors