Homeowners who are looking to sell their homes before going into foreclosure should take a few moments to learn about how a short sale of their home will benefit them and the bank. Thousands of Seattle short sales have benefited both the homeowners and the banks by keeping them out of foreclosure. Banks will accept a lower amount than what is owed on the unpaid balance of the home in order to push the sale threw. In order to place a home up for a short sale, the lender will go over the mortgage rate and make adjustments that would be agreeable for a short sale buyer to pay off the price of the home. Read on for Seattle short sales explained in detail!
With short sales in Seattle, everyone walks away happy. The new homeowner gets a home at a great price, the bank or financial institution recovers the money that is owed to them on the home and the homeowners do not have to go through a stressful foreclosure that will linger on their credit reports. Choosing to do a short sale in Seattle rather than letting your home go into foreclosure will help to keep your credit intact.
The whole process of starting the paperwork for short sales will take some organization in getting all the paperwork together in one file. If the homeowner makes out a list first, it will be easier for them to keep track of what the banks are looking for and what is needed for the closing.
Short Sales Explained Step by Step
The main papers for the homeowner to pull together are all the financial documents. Three years of IRS tax returns, bank statements for at least two years and employment records for the past two or more years. They will need to write a hardship letter explaining why they cannot meet their monthly financial obligations. The bank will want them to include a monthly expense sheet when requesting a short sale of their home. The hardship letter should also include the asking of all deficiencies be waved so there is no remaining debt. This request would then be a part of the approval given to the homeowner.
Other paperwork that will be needed is the Listing Agreement, Sales Contract and the Closing Statement from the Realtor and Title Company. Homeowners should be careful of the Realtor and Title Company that they choose. They will want to make sure that the companies have had experience with Seattle short sales and all the tasks that are expected of them for a smooth sale. The Title Company will need to make sure that there are no liens on the home that would keep the short sale in Seattle from closing.
Do I Continue Paying My Mortgage
The question of whether or not to continue paying the mortgage on a home that might go into a short sale is not cut and dry. Many financial institutions and banks will not grant the approval of a short sale unless the homeowners are already in default. They cannot plan their situation that makes them go into default. It must be an unpreventable issue that has kept them from making the money to pay all their obligations.
It is up to the financial institution or bank to approve the seller for a short sale. Many homeowner who are not in default have been approved for a short sale of their home. If the lien holder will not approve a seller who is not in default, they will be notified quickly.
Many times people have lived in their homes for many months or even years without paying anything on their mortgage. In most cases of homeowners stopping payments on their mortgages, the lien holder will take action within three to five months. The sooner a homeowner can start the proceedings on a short sale the better the chances are for an approval. Banks and financial institutions do not want to lose their investment by having the house go into an auction.
As with anything else in the financial world, the lender will end up reporting your defaults to the credit bureaus. The homeowners may expect their credit ratings to go down because of a short sale, but late payments impact their credit ratings immediately and at a higher level.
Once all the documents are given to the bank, the bank will order a home valuation. The homeowner needs to make sure the broker can give an accurate value of the home. If the appraisal is too high, the homeowner may have a hard time finding a buyer for the price. When the fair value of the home has been established, the financial institution or bank will then review the papers for the short sale request. This process will take about 30 days to complete.
The short sale approval will be issued once the bank and investors agree to the selling price of the home. The homeowners will review all the terms of the selling price and the closing will usually be in about 30 days. They would then have that 30 days to relocate. If there were financial incentives offered to the owner of the home, they would receive those incentives at the closing time along with all the documents.
Incentives for Homeowners to Short Sale Their Homes
Many homeowners are under water with the value of their homes. Many are asking how they can sell their homes when the market has devalued their homes so badly. There are options like the cash short sale incentives that many banks are offering. The incentives programs from the banks will persuade the homeowner or borrower to sell their home as a short sale. Banks are also willing to pay the homeowner a cash amount to list their homes as a short sale property that is available. Homeowners could also benefit from the short sales in Seattle because banks are willing to forgive many deficiency balances that are owed when the sale takes place.
The bank and the borrower will benefit if the borrower short sales a home that is not worth what they now owe on the home. The financial institute or bank will end up with more money at the end of the short sale in Seattle closing then if they had gone through with a foreclosure on the homeowner. Homeowners themselves can also end up with financial benefits at the end of the closing.