A Guide to the Real Estate Short Sales in Florida
Mortgage payments are tough especially when facing financial turbulence. In this case, getting a deal might be the ideal solution for your mortgage problems.
Basically, the mortgagee provides debt relief to the borrower once the sale of the house goes through. The mortgagor is not liable anymore for the outstanding mortgage balance against their home.
Still, the homeowner is expected to follow certain guidelines to qualify. Here are some of the steps you might consider. You can also visit Florida Homeowner Solutions to learn more.
- Contact the lender
You are expected to contact the lender and try to obtain pre-approval before making an offer. Lenders will only talk to real estate agents or potential buyers once they receive consent to do so from the homeowner.
If the deal is approved, the lender may ask to meet with all the parties involved to discuss options and ultimately express the lender's terms.
However, this process might not be as easy as it seems so expect to make several calls before the application is approved.
- Submit a letter of authorization
As mentioned, lenders may want to see a written authorization letter from the homeowner before disclosing any of your personal information.
The letter gives the lender permission to talk to whoever you are working with be it a lawyer, closing agent, title company, or real estate agent. It should include your name, property address, loan reference number, the agent's name, contact info, and the date and effective period.
- Prepare a hardship letter
The lender might ask you to provide valid reasons why you need a short sale before they approve.
As such, you may be required to formulate a hardship letter specifying all your reasons. For the process to be successful, the letter should be captivating and convincing enough.
Let your lender know that you are unable to continue paying the mortgage due to unresolvable issues like divorce, chronic illness, unemployment, or loss of a spouse. Read more here https://www.investopedia.com/terms/r/real-estate-short-sale.asp
- Proof of income and assets
When asked about your current financial status, be honest and truthful. Lenders will want you to disclose your assets and your financial situation before preapproving the short sale.
Do you have a savings account, stocks or bonds, money market accounts, or anything of tangible value? These are some of the things they may want to know.
Lenders will want to know whether you are in a position to pay back your debts in case the process is approved.
- Make an offer
The next step is to prepare a sales contract between a buyer and a seller. Before you make the offer find out the market value of homes in your locality.
Although you might be looking for the best offer on your home, the lender will still try to recover much of the remaining balance on your mortgage as possible.
That said, your offer needs to be reasonable enough for the deal to be approved. Be on the lookout for scammers and avoid giving any bribes for the opportunity to apply for a short sale.
- Have the home inspected
Once you have signed a purchase agreement with the buyer next step is to get a home inspection. The buyer will want to know the condition of the home before closing any deals.
Short sale properties are sold in their current state, so once the deal is closed there is no room for further negotiations.
Be sure to look around the home first and get to know what you're getting yourself into. Also, do research and get the estimates.
- Close on the property
Once you have reached an agreement with the lender, they will approve the deal. The lender will issue a statement waiving the seller's liability for making any mortgage payments after the sale.
But keep in mind that the lender collects all the money from the deal so the homeowner doesn't receive any money. Click here to get more insights.
Short sale offers are a lender's way of trying to provide better deals for their clients to avoid foreclosure properties. Maintaining a home demands time and money. The more the number of foreclosed homes the more the losses. Short sales tend to provide some form of relief to the homeowners and reduce the chances of them trashing the home on their way out.