What is a short sale and how can you benefit from it in Washington?

A short sale is a process where the seller of a property sells the property for less than the amount owed on the mortgage. This can be an amazing way to avoid foreclosure if you're trying to make your mortgage payments.

What is a short sale on a house?

A short sale is a process where the seller of a property sells the property for less than the amount owed on the mortgage. Short sales are typically used to avoid foreclosure because they allow homeowners to sell their homes in Spokane Valley for less than they owe without going through the lengthy and often costly foreclosure process.

A short sale process begins when the owner contacts their buyer and asks if they are concerned about a short sale. If the buyers decide, the homeowner will then put their house on the market and wait for a customer. Credit information is sketched up on the buyer and, if accepted, the sale is finalized. The process usually takes between 30 and 45 days.

Credit rating agencies typically lower a homeowner's credit score during a short sale, but it's still often better than foreclosure sales, which can ruin your credit score for years to come.

How buying a property for short sale works

When a homeowner is considering a short sale, he should contact his lender and let him know that he wishes to sell his home. The lender will then work with the homeowner to find a potential buyer for the property. If a buyer is found and the sale goes through, the lender will forgive the difference between what the seller owes on the mortgage and what the property is being sold for. This is called a deficiency judgment. A mortgage lender usually won't accept a short sale if the seller still has money on the mortgage.

How long does a short sale last?

The time it takes to complete a short sale can vary depending on the situation. Typically, the process takes four to six months. However, if the homeowner defaults on the mortgage or there are other complications, the process may take longer.

A mortgage servicer typically does not initiate the short selling process until the homeowner is at least 90 days past due on the mortgage. Mortgage payment history is an important factor that managers consider when considering a short sale. Late or missed payments will complicate the process. A real estate agent can help expedite the process by gathering all the necessary paperwork and submitting it to the lender.

Short Sale vs Foreclosure

It is important to note that a short sale is not the same as a foreclosure. In a short sale, the property technically still belongs to the owner. In foreclosure, the property is sold by the lender after the owner has defaulted on their mortgage.

A real estate agent can help you determine if a short sale or foreclosure is the best option for you. Your bank statements, W2, and credit reports are required to complete the process. Financial hardship is not necessary to make a short sale. Short sale transactions are reported to credit bureaus, so they are visible on your credit report. A foreclosure sale is not reported to the credit bureaus.

Pros and cons of short selling for the seller

A short sale can be a great way for a seller to avoid foreclosure, but there are also a few things to consider before deciding if a short sale is right for you. Short sale negotiations can be long and complex, and there is no guarantee that the seller will obtain approval from the lender.

The seller's credit score will likely include some of the pros and cons of selling your home through a short sale:

Advantages:

– You can avoid foreclosure

– You can sell your house for less than the mortgage amount

– You do not have to pay any brokerage commission

Disadvantages:

– Your credit rating may be damaged

– You can still be liable for the difference between what you owe on the mortgage and the price at which the property is sold (known as a deficiency judgment).

Short Sale vs. Loan Modification

A short sale is not the same as a loan modification. A loan modification changes the terms of your mortgage to make it more affordable. This can include changing the interest rate, the term of the mortgage, or the number of monthly mortgage payments.

A loan modification is a good option for homeowners who are struggling to pay their outstanding mortgage payments, but it's important to note that a loan modification won't always prevent foreclosure.

Want to sell your home in Washington state as fast as possible?

We buy homes and help homeowners like you, who may not know who to turn to or what options are available to them, with all the professional help they need. Can't sell your home because you owe taxes or want to avoid foreclosure, have a limited budget, want to pay off debts quickly, etc.? Is IRS Lien getting closer?

Do you want to sell your house in Washington, but the property needs major repairs? Do you want to sell your house for cash in Spokane Washington but a real estate agent charges so many closing costs? Property solutions northwest can certainly help you! Simply fill out the form below or call us at (509) 255-7888 and we'll give you a fair valuation of your home within 24 hours with no hidden fees or closing costs!

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