The housing market is chaotic and under water in most areas of the country. “Short Sales” make a viable choice to avoid “Foreclosure” on your home.
1.] In Nevada where everyone is under water, is is very rare that the second mortgage will “Foreclose” on your property. However, you need to be cognizant of when submitting for the “Short Sale” process…both lenders must approve the sale. Occasionally, the second lender will attempt to collect a “Deficiency” against you in court, since the second mortgage is an unsecured debt.
2.] In a “Short Sale”, the real estate agents get paid by the lender. The seller pays for nothing.
3.] If you have any idea that you will need to do a “Short Sale” in the near future, do not attempt to pull out cash from your property, as this will be viewed as fraud. Not only will you not get approved for the “Short Sale”, but you might face criminal indictment.
4.] You always want to avoid “Foreclosure”. In the state of Nevada, if you “Foreclose” on your property, the lender has the right under the law to file a “Deficiency Judgment” within 6 months after the real estate has been sold. You also want to avoid “Foreclosure”, because it stays on your credit for a minimum of 7 years. Under Fannie Mae & Freddie Mac guidelines, you will not be eligible for a loan for 7 years. With a “Short Sale”, it is 3 years!
5.] One of the key things to successfully navigating through the “Short Sale” process is your real estate agent. Do your due diligence. Ask for a referral. Find out who is certified as a “Short Sale” specialist. Interview them. Ask them to lay out a plan of action. Do not be afraid to ask pointed questions. Remember, you are relying on them for everything. A “Short Sale” is a very complicated process and mistakes are easily made. Mistakes that can jeopardize your chances of the lender accepting your proposal, or worse yet…you losing a buyer.
The decisions you make regarding your financial future can be impacted directly not just by your hardship, but by your real estate agent and those who advise you. Do your research. Do your due diligence. Avoid “Foreclosure” at all costs. This is Empowering!