Short sale homes…A Way Out of Financial Trouble
July 27th, 2010
Home owners in Phoenix, Arizona looking to obtain approval for short sale homes need to consider several factors. Short sale homes are on the rise in many parts of the country. This is largely due to the fact that many lenders, such as banks and mortgage companies are taking possession of hundreds of homes due to defaulting mortgages and foreclosure proceedings. So, it only makes sense that these banks do not want MORE homes on their books.
For those that are unfamiliar with short sale homes, a short sale is a process where a home owner has a mortgage that is more than the value of the home. With short sale homes, the home owner can put the house up for sale with the hopes that a low sale price will attract an eager buyer in a short time frame.
In many cases in Phoenix, AZ, short sale homes are priced well below what the home owner owes on the mortgage. The lender will generally allow short sale homes so that they get something out of the situation, instead of getting very little in foreclosure. Bear in mind, however, that the lender must agree to short sale homes. The home should not be put on the market until that approval is made.
When you consider short sale homes as a means of avoiding foreclosure you can help keep your credit report in good standing. Where as, with a foreclosure, your credit will be ugly for a while. You will need to convince the bank that if they allow short sale homes, it would be in their best interest. Because of current market conditions, most lenders already realize this fact.
When buyers consider whether they want to short sale homes, they shold get an appraisal and a market analysis of their homes. This can cost a few hundred dollars, but it is well worth the money when you consider the alternative, foreclosure.
With your new appraisal, go to the lender and ask them to approve of the short sale homes agreement. Explain to them why you need to use the short sale homes process and you may need to provide a hardship letter that details why you can not afford to pay your mortgage any more. The hardship letter is a formality, because the banks have enough foreclosed homes already, but you should still give them a detailed account of your financial troubles.
The loss mitigation department at your lender or bank will usually handle the short sale homes. They are sometimes tough to deal with. So, it may be in your best interest to find a real estate agent that deals with short sale homes. Often times the mitigation department will be more comfortable dealing with someone that is familiar with short sale homes.
With a poor economy and an even poorer housing market, foreclosures are increasing daily. Short sale homes offer the lender and the home owner a way out.
Posted in 
Fred Weaver is a founding co-owner of Group 46:10. He has been working in the financing/real estate business for over 7 years. Fred began his real estate career by working for a large wholesale bank as a processor and rate/lock specialist for home mortgages. After 2 years in the business, Fred transferred from the banking side of home loans to the mortgage side. While on the mortgage side of financing, Fred gained experience originating mortgages and processing files for Morgan Capital of Arizona, Inc.
Kevin is a founding co-owner of Group 46:10. He began working in the real estate business in 2007 after spending 8 years working in the finance industry for companies such as Bank One, Green Tree Financial, & GE Capital.