short Sale Help on the Emerald coast of florida
WHAT IS A SHORT SALE?
Why would someone have to “Short Sale”? It stems from inability to keep and pay the mortgage for a house, condo, townhome or lot for the following reasons: loss of income due to job loss, relocation, divorce, medical issues, separation from military, military PCS and more. These homeowners need to sell, yet have a mortgage that is too high, as their properties were purchased when the market was at its highest. Expensive homeowner insurance costs and association fees for condos in Florida add to the difficulty for borrowers to keep up with their payments. These homeowners also have negative equity, i.e. they owe the lender more on the mortgage than the property is worth. When this is the case, and the borrower needs to sell, one solution is a “Short Sale”.
Definition: A “Short Sale” is when the lender agrees to a accept a payoff for less than the remaining mortgage balance to allow the sale of the property. The lender may forgive the entire shortfall as well as pay the seller’s closing costs including the Realtor fee. The loss is either completely written off by the lender, a payment arrangement is made with the borrower (promissory note), or a lump-sum for a potentially lesser amount is agreed to (cash contribution). The short sale lender may also seek the deficiency from the borrower after the sale. Their will be a written short sale approval that specifies terms at the conclusion of the process.
Why Would A Lender Agree to a Short Sale? Banks don’t want to own your Santa Rosa Beach, Fort Walton Beach, Niceville, or Destin real estate. A foreclosure can cost a lender $30,000 to $60,000. If they take the property back in foreclosure (or deed in lieu of foreclosure), they then have to maintain the property, pay for repairs, market the property, pay utilities, then spend money on closing costs. They would rather do a Short Sale- which saves them carrying and legal costs and generally is less expensive for them. Bottom line – with a short sale, you’ve done the work for them!
Need more information? Contact Wendy Rulnick, Broker, Rulnick Realty, Inc.
850-259-0422 [email protected]
