Short Sales in Rhode Island are a huge part of the real estate market. This post by Bill is a wealth of knowledge to the sellers, buyers, and agents dealing with short sales in Rhode Island.
Understanding Short Sale Transactions | A Guide to Short Sale Facts & Myths
A short sale unfortunately has become a common buzz word in the Real Estate industry. For those that have been hearing the term "short sale" and don't quite understand what it means, a short sale is a legal lender approved solution designed to assist a home owners who is financially strapped to get out from under their mortgage debt.
A short sale is negotiated through the mortgage holder of an owners home where by the mortgage holder agrees to take less than what home owner owes on the property.
A quick example of a short sale would be if a home owner owes $400,000 on their current mortgage and their home is only worth $350,000. The lender in this example would agree to take a short fall of $50,000 at closing.
In some cases the mortgage holder may completely wipe out the debt and the home owner does not have to repay the 50,000. Many lenders may require a seller to sign a note and repay the debt over a certain amount of time. Typically the debt will be reduced and the owner may receive favorable repayment terms of the short fall.
There is quite a bit to know about short sales from both a buyer's and seller's perspective. I have been successfully been completing Massachusetts short sales over the last three years. In fact (knock on wood) I have never had a short sale that did not get approved! Successfully completing a short sale is about understanding the process.
Many consumers make extremely poor choices by working with Real Estate agents that don’t have a lick of experience with getting short sales approved. Picking a good short sale Realtor is critical to your success.
The following is a number of specific topics about short sale transactions that you would want to be aware of if you are planning to either buy or sell one of these types of distressed properties.
Stop making mortgage payments during a short sale? ~ Whether or not a home owner should continue to make mortgage payments is a common question that many sellers want to know when considering a short sale. The most common answer to this question is YES, however it really depends on the lender! Click the link to understand all the considerations.
Picking the right short sale Realtor ~ Picking a Realtor to work with in a short sale is very different than a traditional transaction. You want to work with an agent that has experience successfully closing this type of transaction. Remember as a seller you could potentially be facing a foreclosure. There are many mistakes that are made by agents handling short sales. Don't get caught with your pants down!
Questions to ask a short sale listing agent ~ If you are thinking about buying a short sale there are some specific questions you can ask the listing agent to determine the probability that the short sale will be approved or not. These short sale questions will also help determine if the Realtor handling the short sale knows what they are doing!
Acceptable hardships for a short sale ~ On many occasions when doing a short sale the lender is going to require some kind of hardship on the part of the seller. Short sale hardships however, have become less rigid recently and some lenders are becoming more concerned strictkly on whether the short sale would benefit them more than a foreclosure sale.
Short sale tax consequences ~ Understanding the tax consequences in a short sale is one of the most important considerations for a home seller. Whether the short sale home was a primary residence or an investment property can have different tax implications.
Getting short sale debt released ~ Getting the debt released on a short sale is obviously a very big deal. Many Realtors that are working with short sales don't have any knowledge of how to get the debt released. A seller needs to pay particular attention to this detail as you can expect to be hearing from a collection agency without it!
When to do a short sale home inspection ~ This topic is important to understand from both a buyer's and seller's perspective. A home inspection should be done before short sale approval and NOT after. Read the article to understand why it benefits both the buyer and seller to do so.
Strategic default vs short sale ~ There are many home owners who are deciding just to walk away from their homes. Fannie Mae has started to crack down on this practice and is now penalizing borrowers from getting a mortgage for up to seven years! A perfect alternative to a strategic default is a short sale.
These articles were published on my Massachusetts Real Estate blog where I talk about numerous topics that are important to consumers who may be thinking about buying or selling Real Estate.
I am successfully completing short sales through out the Metrowest Massachusetts area. So far, knock on wood, I have a 100% success rate for short sale approval! If you need to complete a Massachusetts short sale please feel free to get in touch.
If you are outside of the Metrowest Massachusetts area and need to do a short sale please give me a call or email and I would be happy to refer you to a Realtor in your location that handles short sales and knows what they are doing! I have referred short sales to other Realtors all around the country.
About the Author: The above Real Estate information on understanding short sale transactions was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at firstname.lastname@example.org or by phone at 508-435-5356.
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I service short sales in the following towns in and around Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Northboro, Shrewsbury, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Framingham and Douglas MA.
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