The term short sale refers to a sale that takes place when a homeowner is in negative equity. This means when the property value is less than the remaining mortgage that needs to be paid to your lender. The buyer will be a third party, and all the revenue generated from the sale will go to the lender. This type of sale usually takes place when the homeowner is in a financially distressing situation and may be unable to keep up with mortgage payments in the near future. After receiving the proceeds of the sale, the lender will usually treat the loans as being paid at this point and will forgive the remaining balance that is owed. In some cases, a lender can issue legal proceedings to address the remaining balance that is owed but this is rare.
For example, you sell a property for £100,000 when the total mortgage remaining is £125,000. In this example, the difference of £25,000 left to pay on the mortgage is a deficiency. It is important to remember the lender must approve of the decision to short sell, the lender could be losing a lot of money in the process and the final decision will lie with them. They will often ask for documentation that will corroborate the decision to short sell. No short sale can occur without approval from the lender.
Short sales are a long process due to the paperwork that will need drawing up and signing, they can take up to a full year to execute and complete. Short selling is beneficial over foreclosure as a foreclosure can be destructive to a homeowner’s credit rating.
Key points:
- A short sale must be approved by the lender
- A short sale is when a house is sold for less than the amount still owed on the mortgage
- The effect of a short sale is less harmful than a foreclosure
- It can take up to a year to complete
This is quite a brief overview of a short sale. Other things will need thought and consideration, such as finding a buyer once your lender gives approval to short sell. When you are ready to sell, you can use a cash buying service like FastCash4Houses to sell the home for cash in a short period. Our reputation is built on our ability to buy homes in weeks rather than months, avoiding any delays and doing so while avoiding all fees.
For those looking to sell their home in the quickest, cheapest, and most convenient way, then using FastCash4Houses would be the best option. With us, you can sell your property in a quicker time frame with no estate agent or legal fees to pay. To get your free no-obligation valuation today and to find out more about how we can help then visit our website at https://fastcash4houses.co.uk/ or get in contact with us to speak to a member of our team directly on 01204 294356 or [email protected]. At FastCash4Houses, we want to support you every step of the way as you sell your property.
