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Charleston Real Estate Law Blog

What do you do to prove you need a short sale?

If you want to sell your home in a short sale, then you will need to prove to the mortgage company that you are no longer able to make payments because of hardship. The hardship you face should be documented; if that means you lost your job, have proof of your termination, and you should also show financial proof of being unable to continue paying. With your attorney, this information is gathered and submitted to the lender.

Once you've been allowed to start a short sale process, you can list your home and wait for bids. A short sale will be allowed only if your lender approves it. That means that if the lender doesn't think you're getting a good offer, you probably won't get an approval to sell the home and will have to look for a sale at a higher amount. Most of the time, you and your attorney can speak to the lender to determine what amount the lender will accept, which helps avoid a lengthy wait for an approval.

Short sales: When it's time to get out of a mortgage under water

Short sales make it possible to get out of the burden of a mortgage that costs more to you than your home is worth. For example, if you purchased a home for $100,000 and have it appraised five years later to find it's only worth $50,000, then you would want to consider a short sale to get out of the mortgage. Why? The home itself is no longer worth what the mortgage payments would cost, so it leaves you paying into a home that you won't ever see a profit from.

Typically, the seller must be in dire financial straits to do this, and a short sale is taken in lieu of a foreclosure. For a bank or lender, the short sale is a better choice because it means money will come in from a sale, and it will likely be more than if the home goes into the foreclosure process.

You deserve support when you're considering foreclosure

If you're considering foreclosure, it's important to know that you do have some other options. If you take action before a foreclosure is imminent, there are steps you can take to get back in control of your debts, so you can stay in your home.

If you allow your home to be foreclosed on, you could end up owing the mortgage company any money that isn't gained through selling the home. You might also find that you can't get a Fannie Mae mortgage for at least seven years, preventing you from buying a new home for quite a while.

The facts about selling a short sale home

There are a few facts about short sales that might help you make a decision about whether or not you want to sell your home in that manner. For instance, you have to be patient with short sales, because they can take 90 days or longer to get approved. On average, short sales complete within six months, but it varies.

Another thing to remember is that marketing still matters. If you sell your home for less than you owe, you may not have to pay the difference through a short sale, but if you sell it for more, you can reap the benefits. Exposure also helps you get your home noticed, so you can sell it faster and get out of debt sooner.

Basic tips for preventing foreclosure

If you receive a foreclosure notice from your lender, it's imperative that you get serious about your situation. The longer you ignore this the worse your situation will become.

Although you may feel that your home is already lost, nothing could be further from the truth. There are some basic tips you can follow to prevent foreclosure.

You can move your home sale along quickly without legal errors

If you think you don't need a lawyer when you're selling your home, you are likely mistaken. This is the largest sale that you're likely to make in your lifetime; it has the potential to make you money if it goes through correctly. There are a number of legal mistakes you could make if you're unfamiliar with real estate law, and they could result in a delayed sale or even the loss of a sale. Here's some important information on who you may want to work with.

What are Real Property Specialists?

Are short sale rules changing?

If you've considered pursuing a short sale to get yourself out of mortgage debt in the past, news that short sale rules are changing is probably welcome. The new short sale rules can help you, because they have made the short sale process faster. Lenders who receive your RASS document now have to respond within 10 years. If you have a sale that works out and the buyer closes, then you will be eligible for a relocation incentive, too. As of the last update, the incentive was $3,000.

Why does speed matter?

A short sale could be the solution to your debt problems

If you're in a position where a foreclosure may be imminent, know that you might have another way out. A short sale is when a lender determines that it will accept a mortgage payoff that is less than what you owe; when you're in financial stress, this may be one of the best options open to you. You need to make sure that the lender agrees to forgive any remaining debt if you agree to a short sale price, because otherwise you could be left paying the difference between what you owe now and the sale price of your home.

As the seller, you may hope to sell the home for a profit or even to break even. That might not be a possibility, so resolving your debt may be the next best solution. A short sale allows you to do that without taking on debt for a home that you no longer live in. Of course, you will lose your home, but you won't have a foreclosure on your credit report. Your credit may still take a hit, but the lender may help reduce that hit by negotiating with you.

Foreclosure: The result of defaulting

Foreclosure is not just the auction of a home. It's actually a legal right of a mortgage holder if the property is not being paid for as designated by the loan. If the lien is in default, a foreclosure gives the mortgage holder the best chance of making up lost funds.

Many years ago, it was the case that a mortgage would automatically revert to the lien holder in the case that the mortgagee was not keeping up on payments. That has changed today, and people are now given more time to pay off their mortgages and to get caught up on payments. Foreclosures are typically a last ditch effort on the part of the lien holder to make up funds; usually, they'd rather keep someone in the home and receive payments over time, so they can make more than at auction.

Purchasing versus leasing: The benefits of each in real estate

When you're considering whether you want to lease or purchase a facility for your business, you need to consider a number of possible benefits for each. Leasing can be a great option for new businesses, but owning a building can also be a long-term investment. Here are some possible benefits to consider for leasing or owning a property.

The main advantage of leasing is that it costs less up front, which is good if you're only starting the business now and have limited funds. If you don't have a credit rating good enough to support a mortgage, leasing can also be a positive option for your business. Rent is deductible as a business expense, so the tax implications are positive. The landlord must maintain the property, and you may be able to obtain a lease well below what you'd expect to pay for a mortgage.

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