So you want to do a short sale?
Short sales are becoming more and more necessary in this world of no-equity real estate.
Here are some typical questions and answers regarding the short sale process in Washington State:
Q: What exactly is a short sale?
A: A short sale is the sale of a property in which the proceeds that are available from a sale are less than the amount owed on the loan.
Q: I hear short sales a huge headache. Is that true?
A: Yes and No. Short sales require more paperwork to be given from the borrower -typically tax returns, pay stubs, bank account information, and financial statements are requested by the banks in order to approve a short sale. Additionally, the time frame of short sale is typically much longer than a typical sale as the banks do appraisal work on the property, and there is a period of negotiation. If the above two issues are not overly burdensome in your mind, then the short sale is nothing to fear.
Q: What happens to the potential deficiency? (amount owed (less) proceeds from the sale)
A: In our opinion, this is by far the biggest issue in short sales. IF THE BANKS DO NOT WAIVE THEIR DEFICIENCY RIGHTS, YOU WILL STILL OWE THE MONEY.
That said, banks are often willing to reduce the entire deficiency or a part thereof.
** This is truly a point of negotiation and every case has different arguments as to why the deficiency should be waived - whether it be potential bankruptcy or foreclosure protections allowed in your state. There are numerous arguments that can be persuading to the banks to waive or lower these deficiencies.
Bottom Line: short sales can be a terrific tool to assist you in getting out of your 'underwater' mortgage in a fashion you may not have expected. It could save you from bankruptcy, and/ or foreclosure.
The key is to fine a competent Realtor and/ or Short sale facilitator to protect your best interest, and push the deal through as effectively as possible.
For more information, consider contacting a Seattle Short Sale Attorney.
Weitz Law Firm, PLLC
5400 Carillon Point
Kirkland, WA 98033