If you are in the process of trying to sell your home, you may benefit from the short sale process in Maryland. For example, if you are selling your house and the offers you have been receiving are too low that they are unable to cover the amount you still owe on the mortgage, but you are desperate to sell, so you take a lower offer. This is known as a short sale and as described, you will pay back the lender “short, ” and the bank makes an agreement to accept this amount.
According to more recent data, derived from a real-estate information business such as RealtyTrac, around 5.1% of condos and single-family home sales in the early part of 2016 were short-sales. In many cases, homeowners are forced into a short sale situation due to personal financial issues which have made it very difficult or impossible to keep up with their mortgage payments. Also, they discover that it is near to impossible to sell their homes at the prices that would allow for them to settle their existing loan, particularly when market trends have decreased the real value of their homes.
While selling a property, under these circumstances is not thought of as ideal, some experts agree that this decision is more beneficial to the seller than having to pursue drastic measures such as foreclosure or bankruptcy. Below are some of the benefits of the short sales if you are a distressed seller:
- A short sale is far less damaging to your credit report compared to the credit report you would receive from a foreclosure. What this ultimately means is that you can recover quicker in regards to applying for another mortgage in the future.
- You can avoid the shame of losing your home to foreclosure.
- A short sale allows you to remain in your home until such stage that the sale has been completed.
- While in a normal sale you would be responsible for paying the closing costs, and commission for the real-estate agent, in the short sales you pay nothing, and the bank is responsible for all these fees.
How Does A Short Sale Happen?
They begin like any of the standard home sales in the way of contacting a realtor, preferably the one that specializes in this sale type, and then list the home stating that it is a short sale or subject-to-lender and then wait for offers. However, once you have accepted, things can become complex as you will need the bank’s blessing, and because the lenders typically lose money on short sales, they usually are not eager to accept.
To ensure that you receive approval for a short sale, your bank will ask you to submit the necessary paperwork that includes an offer letter along with your “hardship letter.” The hardship letter explains the reasons that you are unable to keep up with the mortgage payments along with income statements, financial documents or even medical bills which will back this up.