What’s the difference between a Distressed Sale and Short Sale in Real Estate?
A Short Sale is a Distressed SaleDistressed real estate sales can take the form of many scenarios. It can come in the form of the house, duplex, or second home needing a new roof, septic replacement, electrical issues, or the owner being under financial duress with a perfectly fine house. In the previous article I talked about that it can even be an IRS lien causing the financial stress. I want to talk to you about a solution that works for property owners that need to sell but have a mortgage that can not be paid off after paying the selling expenses. The solution is what is known as “Short Sale”. What is it? Does it mean that the sale will be finalized and closed quickly? The answer is most times it is long process. A short sale may be pursued when the property owner is in a financial situation where the mortgage payment can or is no longer affordable. Here is a list of things that I have seen in my real estate career that may make the home unaffordable.
- Job loss
- Medical bills
- Reduction in household income
- The death of one of the borrowers
- House insurance cost increase
- Unable to address house maintenance issues
- Must sell for less because of the house’s “as is” condition
- IRS lien
- Credit card liens
- Truck loan lien
- Reverse mortgage
- Not behind on the mortgage payments
- County lien
- City lien
- State loan
- More than one mortgage
- And more…
- A third-party authorization for your agent to talk to the lender and any other lien holder.
- The listing agreement
- A printout of the Multiple Listing Service listing information sheet
- A financial statement showing monthly cash flow
- Your last 2 to 3 bank statements
- Your last 1 to 2 tax returns
- If you have your own business, then expect to provide a YTD profit and loss statement
- A hardship letter explaining your situation and the reason for short sale request
- The sales contract
- Preliminary settlement statement
- The buyer’s proof of funds or pre-approval letter
Photos of Short Sale HomesI have done short sales with people from all walks of life. Homes can be in any condition.
So how do I avoid a short sale?Thank you for reading this article entitled, What’s the difference between a Distressed and Short Sale? If you would like to talk about your situation, even if you have owned your home for decades, please give us a call. We may not have the answer for you, but we may be able to point you in the right direction. Or, we may be able to buy your house in Pensacola and help you avoid foreclosure and regain your peace of mind. Call us today for a Free consultation! Your Buy My House Guru & Friend, Jack Lara
Also, don’t let the unknown stop you from investing in property someday either. Contact us today to see how selling your one house today can lead to multiple properties for you down the road. Here’s a link to a brief article to start you in that direction. Call us anytime for more information at 1.850.616.6377!
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