Short sales allow a homeowner to close on the sale of property worth less than the debts secured by it. Typically, the lender agrees to accept the net proceeds from a closing in exchange for releasing its lien. Lenders are not agreeing to a short sale to be generous, they are convinced that it will come out better than it would by foreclosing on the home and pursuing the borrower for its losses. While the procedures for a short sale will vary from lender to lender, most lenders need to be convinced of the following:
The sales price of contract is equal to what they would be able to sell the property for after a foreclosure. While the lender may review the market analysis provided by the agent, they will often confirm the market analysis by contacting its own sources, such as an appraiser.
The commission for the transaction is equal to the commission it would pay its agent for selling the home after foreclosure. The lender will need to know as precisely as possible the amount of proceeds it can expect to receive from the sale.
The lender will want an explanation of the circumstances which caused short sale in the first place. These usually include death, medical problems, divorce, loss of a job, or a job displacement requiring a move.
The seller doesn't have the resources to make up the mortgage shortfall on their own. The lender will require a full assessment of the financial condition of the seller. Financial statements, income and expenses, tax returns and the seller's paycheck stubs should be provided. The seller's financial condition is a tricky proposition. While the lender will be reluctant to approve a compromise without reviewing strength of the seller, this information will help the lender in pursuing the seller for a post-foreclosure deficiency if the short sale does not take place.
A seller with few assets, little or no income, and a willingness to file bankruptcy has little to lose by providing this information. Those with other assets, a good job with garnishable wages, or a desire to avoid bankruptcy will put themselves at risk in the process. Those considering a short sale need expert legal advice regarding the wisdom of submitting financial information to the lender.
Search Property for sale in Benzie, Grand Traverse, Leelanau & Antrim Counties. Find Lakefront property on Long Lake, Green Lake, Silver Lake, Bass Lake, Boardman Lake, Dyer Lake, Lake Doubonnet, Duck Lake, Rennie Lake, Spider Lake, Indian Lake, Cedar Hedge Lake, Ellis Lake, Fish Lake, Brown Lake, Sand Lake, Muncie Lake, Arbutus Lake, Fife Lake, Little Traverse Lake, Lime Lake, Lake Leelanau, Cedar Lake, South Bar Lake, Davis Lake, Elk Lake, Lake Skegemog, Clam Lake, Lake Bellaire, Hanley Lake, Ben-way Lake, Torch Lake. Jules B. Yates (webmaster) - Associate Broker, Exit Realty Paramount, Traverse City, MI 49684 - 231-218-5199. Real Estate for sale in Northern Michigan.
The information contained herein and contained in any supplemental documents has been furnished by the seller and/or other sources. We believe these to be reliable and have made every effort to provide accurate information. However, the brokers involved are not responsible for misstatements of facts, errors, omissions, prior sale,change of price or withdrawal from the market without notice. Owners are not to be contacted directly by referral brokers, agents or prospective purchasers. All arrangements for inspection of the property must be made through the listing agent.
