Do You Owe More on Your Home Than It Is Worth?

If you owe more on your home then it is worth and need to sale chances are we can help you with what is called a "short sale"

What Is a Short Sale?

In short a short sale is when you have a liens against the home that exceed the current value of the home. In other words after selling your home you will need to pay all the liens, realtor commissions, closing costs before you can transfer title to a new party. If you are short the funds needed to pay off all the expenses then you will need to come in with cash at closing or or get your bank to approve a "bank approved short sell". By doing this the bank will pay all the realtor commissions, all the closing costs, and settle the remaining bank leins with the leftover proceeds from the sale of the home.

How Does a Short Sale Work If I Have More Than One Loan against the House?

If you have more than one loan against the property, your realtor will need to negotiate a settlement with any lenders in second or third position and get your primary loan or the loan in first position to agree. For example let's say you have a home that is worth $75,000. You have a first loan against the property for $100,000 with Wells Fargo. You've taken out a second home equity loan against the property for $50,000 with Bank of America. In order to get Bank of America to cooperate with the short sell they will expect some proceeds from the sale of the home. This may even be a very small fraction of the original loan. In order for this to happen you will also need to get approval from Wells Fargo, the loan in first position.

Having more than one loan against the property does complicate things to a certain extent. The process usually takes longer than it otherwise would if there was just one loan on the property.

Do All Homeowners That Are "Underwater" Qualify for a Short Sell?

In most cases in order to qualify for a bank approved short sell, the homeowner will need to demonstrate to the bank that there is a hardship such as loss of income, loss of job, relocation out of area, excessive debte, etc.

Advantages to Complete in a Utah Short Sale vrs. Foreclosure

A short sale has a far less negative impact on your credit score than a foreclosure allowing you to purchase a property much sooner. Other advantages are:

A short sell can minimize the deficiency balance

A short sell can minimize the tax liability

A short sell gives the borrower an opportunity to negotiate the best possible terms with their lender

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