If you’re interested in a short sale or curious about what it is, you’ve come to the right place. My team has become known as the short sale experts in Bergen County. There are unique issues that accompany a short sale, and we have made it our business to know all there is to know about this type of sale.
What is a short sale?
The abbreviated definition is that a short sale home is a process designed to avoid foreclosure for a homeowner in financial hardship. A homeowner sells their home for less than is owed on the mortgage. This means a homeowner is able to avoid the well-known pitfalls of a foreclosure and step away from a home they can no longer afford.
How do I sell my home this way?
1. Speak to your lender- First, you will have to speak with your lender to have them sign off on the short sale. Since you’ll be paying less than you owe on your mortgage, it’s important that the lender understand that you are in true financial hardship. This will involve showing bank statements, income, and other financial documents. Speak with your lender to establish what needs to happen before the short sale can move forward.
2. Call an experienced agent- The next step will be to find an agent who is known for their work with short sale homes. Here in Bergen County, the BC Home Team has a solid reputation for our work helping families sell their homes this way. Our connections and experience are unparalleled in the area. We make this difficult process easy for homeowners and can be with you each step of the way.
3. Sell your home- Your agent will list your home and find a buyer for your home following the first two steps. This will look like a traditional sale in most respects. Once a buyer has been found, the next step can begin.
4. Get approval- Although you have a buyer, your sale must be approved by the lender. This could mean negotiations between your lender and the buyer’s lender. Depending on the type of sale, the approval process could take up to four months to complete.
5. Finalizing the sale- After the home has sold, your debt will be forgiven by your lender. Foreclosure will be avoided and you can walk away.
6. Your next move- You may be wondering what the ramifications of a short sale will look like. It’s important to note that your credit score will take a hit. This will be much less dramatic than if your home had gone into foreclosure. You will also have to pay taxes on the forgiven debt. In approximately four years, you’ll be able to apply for a loan to purchase a new home. Although this may seem like a long time, it is much shorter than the seven years of wait time that is typical when a home has been foreclosed.
In many ways, a short sale is a great option for homeowners who have experienced extreme financial distress and are no longer able to afford their home. If you are considering a short sale of your Bergen County home, give us a call. As the local experts in short sales, we can walk you through this unique process with compassion and understanding. We can work with you to help you find the best possible outcome. Contact us today.
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