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Looking for a Simple Short Sale Definition? Here It Is!

Guest post by: Bud Gragg

Article Overview: The easiest short sale definition is that a short sale is a situation where your mortgage lender agrees to let you sell your house with the stipulation that, once the house is sold, your business agreement is fulfilled.

Looking for a Simple Short Sale Definition? Here It Is!

The easiest short sale definition is that a short sale is a situation where your mortgage lender agrees to let you sell your house with the stipulation that, once the house is sold, your business agreement is fulfilled.

In other words, you won't have to pay a penny more on your mortgage and the lender won't have to deal with the costs of a foreclosure and of maintaining and then selling your house later. You must hire an educated short sale Realtor in order to accomplish this though, or to get a full understanding of what any additional ramifications you might have, due to your circumstances.

The thing a short sale isn't is short—doing a short sale doesn't mean your house automatically sells in a few weeks. It can take as long as a year to get a deal! But, in the meantime, you're living in your house rent-free. And that can be a huge relief to people with underwater mortgages or others who are having trouble making payments.

And with this economy, a lot of us fall into one or both of those categories!

Now, there are some limited circumstances where you might want to choose to stay in your house and keep paying your mortgage, even if that mortgage is under water. If you can afford the mortgage and you're less than 10% underwater, you may well recoup your property value over time. (And we do mean, “over time.” We don't see it happening quickly!)

Likewise, if you're close to the end of your mortgage, why would you want to short sell and walk away from all of the money you've invested in your house? Whether or not property values in your area ever bounce back, if you stay, you will have a place to live. If you short sell, you'll be starting all over again.

But if you don't fall into those limited exceptions, then a short sale may well be the way for you to go. There is no reason you should struggle with your mortgage until every bit of your savings are gone and you're being foreclosed on anyway! That option leaves you with no money in the bank to start over with and with nowhere to live.

The first thing you need to do to prepare for a short sale is to find and hire a Realtor who specializes in them. Whatever you do, don't let your lender choose the Realtor!—you want someone who is looking out for your interests not your lender's! It will be your Realtor's job to work with you to set the listing price for your house. And it will be your Realtor's job to negotiate the deal so that your lender agrees to accept the purchase price of your house instead of the amount you own on your mortgage.

You may have to be persistent. In fact, you can almost count on it. While times are changing because of millions of foreclosures, there are still mortgage lenders out there that are stuck on the idea that they can squeeze homeowners for every last penny on their mortgages.

But if you're persistent and prepared, at the very least you're buying yourself time before a foreclosure can start. And while you're negotiating for a short sale, you're living in your house payment-free!

Before you consider foreclosure, then, have your Realtor try to negotiate a short sale with your mortgage lender. A short sale, by definition, makes sure that everyone wins—at least a little bit.

Please don’t worry about how to find an experienced, certified short sale Realtor in your neck of the woods. Just contact us and we’ll be happy to help you!

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  There is Life After a Short Sale or a Foreclosure!

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