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Short Sales in CT > Blog > Selling Your Home for less than the bank mortgage, Selling My House Short Sale (Connecticut)

Selling Your Home for less than the bank mortgage, Selling My House Short Sale (Connecticut)

August 27, 2012

   A Short Sale in real estate is when a home is sold for less than the mortgage balance and the borrower is unable to bring the cash difference to closing.  In most cases the debt is forgiven by the lender in exchange for the homeowner cooperating with the sale, but there are times when the bank/lender may request the borrower sign a note to pay back part or all of the difference, However, the home owner must agree to the final terms of the short sale and at no time can the bank force the home owner to sell their home prior to foreclosure. 

    In today’s real estate market, short sales have become so popular that lenders have been struggling to keep up.  Approval times range anywhere from 3 weeks to 3 years with 6 months being the average.  Lenders short sale systems are slowly improving and we are likely to see faster turnaround times in the immediate future, Even the government has worked out short sale programs such as the new HAFA program which, if eligible, ensures that the 1st lien cannot go after the home owner for any losses and may provide the home owner with $3500 or more in moving expenses.

    Selling a home via short sale should be done by a Realtor with training or experience in working with lenders and the short sale process.  The lenders would prefer dealing directly with the Realtor and it also takes a big burden off the shoulders of the home owner as it can be very frustrating dealing with the lenders and their often times unorganized faulty systems and servicers.

    A Short Sale situation generally arises in a declining market and can come about by any number of reasons from divorce, illness, job loss or simply an increasing adjustable rate mortgage.

    In order to quality a home owner for a Short Sale, the lender will want to re-qualify the home owner in a similar fashion as to when they first applied for the mortgage, but this time to verify that the loan is too expensive for the home owner to continue paying, and that a foreclosure would be inevitable in the near future.  To proof this, the lender will want to see.

    - Two recent pay stubs
    - Two years tax returns
    - Two months bank statements
    - A hardship letter describing the situation

    In most cases the home should be listed on the market with a Realtor and the package submitted to the lender a long with a signed purchase and sale agreement with a pre-qualified buyer.  Once the documents are loaded into the lenders system, they will then hire a local Realtor or Appraiser to assess the property’s value in order to make a judgment to either accept or deny the contract.  From there the package details are forwarded to the investor who actually owns the mortgage note for final approval or a counter offer.   This system has changed slightly with the new HAFA program which is supposed to have a short sale price pre-approved before even being listed for a fast approval time.  As long as the appraisal is not overpriced, this system may get more short sales approved.

    If you need to sell your home short sale, or would like to buy a short sale home in the New Haven County area, please feel free to contact me.

Phil Zimbardi
Real Estate Agent / Broker 
/ Realtor
Real Estate Photographer

TOP END Properties

Phone: 203-936-7776 (Cell/Text)

We are the future of Real Estate. 

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