Short Sale

 

If you owe more on your mortgage than your house is worth, and you want to sell your house, then a Short Sale might be an option for you.

In 2004 short sales accounted for only 4% of all home sales across the U.S. but today in 2014, Short sales account for an average of 25% of all home sales. Why have short sales become so common ? As you know, the economic crash of 2008 caused housing prices to fall, leaving many Americans owing more than their house is worth. As a result, the Federal Government passed several laws that encourage banks to do short sales. But there’s more. Here in Oregon, the foreclosure process has become more difficult and expensive for Banks to complete. Oregon used to be a Non-Judicial Foreclosure state, but several court cases found fault with the bank’s foreclosure methods resulting in homeowner’s who won law suits and reversed their foreclosure. As a result nearly all banks have now changed to using the more complicated and expensive Judicial Foreclosure process in Oregon.

An Opportunity for You
When housing prices fell by 50% in Ireland, people who owe more than their house is worth are stuck being responsible for that debt until it is paid off. There is no such program for debt relief in most of Europe. Only in America do we have such a tremendous opportunity. Think about it. Let’s say that you borrowed $200K to buy a house. Then the value of your house fell to $150K. In order to sell it you would find a buyer to pay $150K, but you also need to bring $50K of your own money to closing to pay off the bank mortgage. On the other hand, if you do a short sale, the bank would accept the $150K as a pay off for the $200K loan. That’s a loss of $50K for the bank, and a gift of $50K to you. You should not think of this as your right, but rather as a tremendous opportunity to get out from under this debt.

How can you sell your house on a Short Sale ?
A Short sale is not for everyone. Here is a summary of the steps.

  1. You must be behind on your payments. Don’t stop making your payments just to initiate a Short Sale. This would throw you into the foreclosure process and put you at risk of losing your house. But if you are already behind on you payments out of necessity, then a short sale might be possible.
  2. You must have a good reason why you cannot pay back the money that you borrowed. The most important step in the Short Sale process is the “Hardship Letter”. In this letter you will explain the circumstances. For example, you have cancer, and medical bills have driven you into debt.

Summary of the Short Sale Process

If you meet the criteria above, and you’d like to start the short sale process, Cherry Blossom Homes may be able to buy your house. Here is a very brief overview of the process.

  1. We meet at your house and explain the process.
  2. Sign several documents:
    • Release of information doc. (allows your bank to speak to CBH about your house and mortgage).
    • You write a Hardship Letter (explains your financial situation).
    • A package of Short sale documents (determined by your bank).
    • Offer to buy you house for less than what is owed.
  3. We send all documents to the Bank.
  4. It can take from 1 to 6 months for the Bank to approve or reject the short sale.
  5. If they approve it, we negotiate the price with your Bank.
  6. Bank signs a documenting agreeing not to come after you for their loss.
  7. We meet at closing to sign paper work.
  8. You walk away with the debt forgiven, and no Foreclosure on your credit record.

Complete our Seller Questionnaire and we can help you!