What is a Short Sale?
A short sale takes place when a property is sold and the proceeds from that sale are below the outstanding loan balance. The benefit is when the lender or lien holders agree to take less then full amount of what is owed. The property gets sold, the loans are paid off and the homeowner avoids foreclosure.
Do I qualify for a Short Sale?
In order to be considered for a short sale, you must first owe more on your home that what it is worth and we must be able to build a case to show your lender a form of financial hardship. Acceptable hardships include:
Unemployment or reduced income
Death in the family
Permanent change of station orders
Mortgage adjustment/ payment increase
Insurance or property tax increase
We have developed a great tool based on our experience, to help qualify our clients for a potential short sale. Filling out the short sale pre-qualification questionnaire is the first step to finding a short sale solution for you.
Will I have to pay the difference?
Maryland is a recourse state, which means banks have the right to pursue a homeowner for the difference between the sale price and the amount owed on the property, also known as the deficiency. Although banks have this ability, it is our job to have them agree to short as much of your debt as possible or a full deficiency waiver. A full deficiency waiver is the best case scenario as the entire debt is cleared and the bank waives all rights to pursue you for the difference.
How will a short sale affect my credit?
The important thing to remember is to avoid having a foreclosure on your credit report. A foreclosure does more damage to your credit than a short sale, although it is difficult to give exact numbers on the credit effects without knowing each individuals specific scenario.
Do I have to be behind on my payments?
It is possible to short sale a property being current on your payments, but it is up to the lenders discretion. Most lenders have specific delinquency guidelines that would need to be met before they would consider a short sale as a solution.
Contact Us today. Your Maryland Short Sale Team is here to help!