Short Sales 101 – Naples Real Estate. Less Deleterious
Upside down home owners who may be facing a potential short sale or foreclosure on their homes have options that they should definitely explore. A short sale is supposed to have a less deleterious effect on the credit than a foreclosure and with a short sale on your credit report you’ll qualify for a mortgage sooner than you would with a short sale. Here are some things that you should know about short sales in order to know if you qualify for one or if you should be calling your friendly local Realtors, Mike & Anna Bryant, 239.293.0246 and discussing your options. Please note that regardless of whether or not you’re upside down in your loan, you still have to have a legitimate financial hardship that has occurred since you qualified for the loan.
Here are some generally accepted hardship situations:
Debilitating illness
Loss of employment or decreased income/hours
Failure of a business for the self-employed
Major damage to the property (perhaps underinsured)
Death of a spouse or wage earner in the family
Death of a non-wage earner who may have been a financial contributor even if not on mortgage.
Inheritance of a property that cannot be afforded by the person who inherited the property whether it’s that the maintenance is too high, mortgage is too high, HOA fees, or other fees and costs associated with the property.
Divorce or changes to the family unit
Relocation of the family or wage earners
Increases in insurance, tax, payments, or mortgage amounts
Service in the armed forces
Excessive debt relative to the income available
Any major change that has negatively affected the owners ability to maintain the home, mortgage and associated bills.
Or some combination of these items…
Any hardship has to be one that can be documented and proven. Lenders are going to ask you for pay stubs, tax returns, and bank statements. If you’re getting divorced, they’ll want to see proof; if you’ve got a medical issue, they’ll want to see your records. No matter what your hardship may be, you’ll need to document and the more that you can send the lender to show that you have a true hardship and deserve the loan forgiveness, the better a chance that you have of this actually occurring.
With a number of these lenders, you can go directly to their websites and get more information on what will be needed for the short sale:
Please note that quite often the bank that you’re making your mortgage payment to is not the “investor” who actually owns the note and makes the final decision on your short sale. Often we are working on short sales and after everything has been done and submitted, the investor has to review the entire file and make sure that it’s approved under their standards which may be different from the bank that we’ve been working with all along. This can really change the timeline for the approval of your short sale. FHA and Fannie Mae/Freddie Mac loans can take up to 60 days after they get all documentation including appraisals. USDA and VA will take even longer, sometimes up to 75 days but there is no hard and fast rule of thumb to go by; every short sale is different.
The best advice that we can give you if you want to look into whether or not you qualify for a short sale on your Naples real estate is to contact us and let us review your options. You should also talk to your accountant and/or your attorney to make sure that you know all the ramifications of your potential actions and that you are aware of the tax consequences early in the process.
We’ve assisted homeowners and commercial property owners in every aspect of renting, buying, and selling Naples real estate. We’d love the opportunity to meet with you and assist you with your real estate goals in both good and bad times.
