I discuss what is a short sale and the requirements to be considered for a short sale.
Hello everybody and welcome to another episode of the Reside Daily Bite; I’m your host, David Doucette. We’re going to do a quick bite today. I’m going to jump on a call but I want to talk about short sales and what exactly a short sale is.
Short sales are often times mentioned in the same breath as a foreclosure, but, they’re two totally different things. I’ll cover what a foreclosure is on another bite but a short sale is essentially when somebody wants to sell their home and the amount that they owe on it is more than what the house is worth. So for example, somebody might have paid $600,000 for their home two years ago, they need to sell it now -it’s only worth $400,000. Now, there’s a gap in that mortgage difference. In a short sale, there are 2 recipes or 2 ingredients that need to be to qualify for short sale.
Number 1: Your house, obviously, has to be under water
Number 2: You as the homeowner have to be in dire state; there has to be financial hardship that you are currently in or it’s coming up, it’s imminent
You need those 2 ingredients to consider a short sale. Let’s say, you owe $600,000 on your house. It’s worth $400,000 but you have $500,000 sitting in the bank. They’re not going to allow you to qualify for short sale (and you need the sell). You could sell it as a normal transaction. And then the $200,000 difference…the bank would expect you to make that up (with the savings that you have).
So, short sales… your house has to be under water -meaning you have to owe more than what the house is worth and you have to be in dire state. You have had to exhaust all of your financial resources –lost your job, a whole host of things. That’s a short sale. Tomorrow, I’m going to give you a great website for short sale information.
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My name is David Doucette. Thank you so much for checking out The Reside Daily Bite.
Tags: buyers, news, patience, short sales