Short Sale Definition: Simply put, a short sale occurs when a home's market value is less than the outstanding mortgage debt plus the cost of sale (sometimes called an "upside down mortgage"). In order for a short sale to actually close, the lender must agree to write-off a portion of the outstanding loan debt. 

Short Sale Example: For example, if a home is currently worth and sells for $300,000 with $20,000 cost of sales, and the total outstanding loan balance is $390,000, then the lender(s) would have to agree to reduce the mortgage loan debt by $110,000 in order to allow the short sale escrow to close. At the close of all of our short sale transactions, the homeowner incurs no cost of sales, for we insure the fees and expenses are paid by the lender.  

Why Would a Lender Consider a Short Sale? Lenders often entertain such an option for in the long run, they will usually receive a higher percentage of their principal back as compared to forcing the property into foreclosure. Foreclosing on a property is expensive and includes attorney's fees, repair and maintenance fees, carrying costs and the lender runs the risk of property neglect or damage, and additional delays and costs, and other market losses. Vacant and neglected homes often sell for much less than market value.  

Today, most lenders won't commit to a short sale until there is a valid and firm purchase offer in hand from a qualified new buyer, and a knowledgeable agent who can negotiate the transaction. It's imperative to work with an experienced real estate agent that knows how to prepare a professional and complete short sale package. 

How is a Short Sale Negotiated with a Lender? Short sales are one of the most difficult and complicated residential transactions. Compared to a regular sale, these transactions require additional paperwork, intricate negotiations with the lender's short sale negotiators, and careful preparation of the process and purchase offer. A short sale package typically includes: an authorization for a 3rd party to communicate with the lender on your behalf, an accepted sales contract on the subject property, buyer's loan qualifications, an analysis of the fair market value of the home, current local real estate market conditions, seller financial information, seller hardship letter and more.  

Basically, the short sale real estate professional must demonstrate to the lender that the home is upside down, the purchase offer is fair and just and that the homeowner has a financial hardship worthy of a short sale. This financial hardship does not need to be severe and can include job layoffs, job transfers to a different area, illnesses, divorce or even the unexpected large increase in mortgage payments due to interest rate resets. 

What's Causing the High Volume of Short Sales in the Georgia Real Estate Market? Today, the "upside down mortgages" in Georgia are due mostly to the risky, highly-leveraged loans that were extensively used over the past 7 years to purchase homes with little or nothing down. Worse yet, many of these loans were adjustable rate loans, or negative amortization loans in which the loan balance gets higher every month.  

In addition, Georgia home prices have decreased by as much as 25% to 30% in some areas. These factors are causing many homeowners to consider a short sale to solve their financial crisis. As a result there are thousands upon thousands of Georgia homeowners who are upside down on their mortgage loan by tens of thousands of dollars and can no longer afford their mortgage payment. 

Do I Need a Real Estate Professional to Conduct my Short Sale? As the short sale process really begins when an accepted contract is submitted to the lender, it is in the seller's best interest to do everything to obtain a reasonable offer to purchase within a reasonable time frame. Let a experienced and knowledgeable real estate professional market your home and get you that offer.  

Time is of the essence and short sales are usually pre-foreclosure situations where the clock starts ticking as soon as a payment is missed.  

It is theoretically possible to conduct your own short sale. But why would you? A short sale can be very long and emotional process. In a short sale, the seller is not allowed to net any proceeds from the transaction and the lender pays all real estate fees. These are very complicated negotiations, which we are trained to handle. In other words, there is no advantage to you in NOT using a professional to negotiate on your behalf. 

Why Should I Work with Ursula's team? We are glad you are thinking about this question... Not all short sales submitted to the lenders actually are accepted and go to closing!!! Our short sale closing ratio is at 95%. How you may ask? Experience - Education - Tough Negotiations - Persistence. We are certified short sale professionals and hold loss mitigation certifications.  

Please give is a call TODAY, so we can begin to help you TOMMORROW. Call us at: 678-569-4044, or drop us an email at: ursula@callursula.com. We'll keep the conversation and your situation in strict confidence. If you prefer, contact us by filling out the form below.