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Last year I was facing foreclosure. If you have a few minutes, I’d like to share my story with you. My name is Jeff, and I’m a local real estate agent with Lakes Area Realty. I have a loving wife, 2 great kids, and a dog. A family man if you will. In 2005 I was on top of the world, making lots of money. I had a new car, all kinds of “stuff”, and a new $520,000 house. I didn’t have a care in the world. Then in 2007, the real estate market turned. All of a sudden making money wasn’t easy anymore. I must admit the next three years are kind of a blur. We traded in the fancy car. We started spending within our means. Heck, we even dropped Netflix. By the end of 2010 we were doing ok. We had pretty much all of our bills under control except for the house payment. And it was a big one. We had gone back and forth with our lender. They even modified our loan. (yes, loans do get modified) Even with the reduced payment we still could not make our payments on time. Something had to give. After a lot of soul searching my wife and I decided to make a business decision regarding the house. The question we NEVER had a good answer for was…”Why are we holding on so tight to a house that is UPSIDE DOWN in value over $200,000 and we can’t afford” Once we took emotion and fear out of the equation, the decision was simple. Sell the house and start over! And that is exactly what we did. We listed our home at market value, got an offer acceptable to the bank, and the rest is history. The bank forgave our debt, paid the realtor fee, all the back taxes, and all the closing costs. It cost us NOTHING to short sale our home. What did we get in return? We avoided a foreclosure, saved our credit (already back over 700!), and even got $3,000 (HAFA) for moving expenses from our lender! Today, things are better than we could have EVER imagined. My family is happy and healthy. I’m sleeping through the night. My real estate business is thriving! In fact, I’m proud to say 2011 was my best year ever in real estate! I did it mostly by helping people just like you. At the end of the day, no one knows your situation better than you. If you are trying to keep your home, I wish you the best of luck. I hope you find the help and support you need. On the flip side, if my story has provided some clarity on what is possible, or even encouraged you a little, please give me a call or send me an email. I’d love to share my experience, knowledge, and expertise with you. In short, I’d like to help you get your life back. One call is all it takes. I look forward to hearing from you.
Jeff
Below is a more technical definition of a short sale: A short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold. [1] In a short sale, the bank or mortgage lender agrees to discount a loan balance because of an economic or financial hardship on the part of the mortgagor. This negotiation is all done through communication with a bank's loss mitigation or workout department. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale. Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market and the borrower's financial situation. A short sale typically is executed to prevent a home foreclosure, but the decision to proceed with a short sale is predicated on the most economic way for the bank to recover the amount owed on the property. Often a bank will allow a short sale if they believe that it will result in a smaller financial loss than foreclosing as there are carrying costs that are associated with a foreclosure. A bank will typically determine the amount of equity (or lack thereof), by determining the probable selling price from a Broker Price Opinion BPO (also known as a Broker Opinion of Value (BOV)) or through a valuation of an appraisal. For the home owner, advantages include avoidance of a foreclosure on their credit history and partial control of the monetary deficiency. A short sale is typically faster and less expensive than a foreclosure. In short, a short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount. It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer. Short sales are common in standard business transactions in recognition that creditors are not doing debtors a favor but, rather, engaging in a business transaction when extending credit. When it makes no business sense or is economically not feasible to retain an asset, businesses default on their loans (called bonds). It is not uncommon for business bonds to trade on the after-market for a small fraction of their face value in realization of the likelihood of these future defaults.
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