Short Sale

What is a short sale?
According to foreclosureuniversity.com, "a short sale is when a lender accepts a discount on a mortgage to avoid a possible foreclosure auction or bankruptcy. Instead of buying from a seller, you are purchasing the property directly from the lender for a discount. For example: A homeowner, who is facing foreclosure, has an existing first mortgage of $300,000. You write an offer to the lender for $220,000, which is accepted as full payment for the loan."

Pros and cons of short sales
Pro: Getting the property for less than what it would cost for the owner to reinstate the mortgage can be a windfall for the buyer.
Con: Short sales can require more work on the part of the buyer who must also qualify for the transaction -- and often be able to pay entirely in cash.

Did you know?
- Frankie Orlando, the author of The Pre-Foreclosure Real Estate Handbook, says that Fannie Mae and Freddie Mac will accept 85 to 90 percent of the fair market values in a short sale, and HUD will accept as low as 82 percent.
- To make a case for the short sale, the buyer needs to compile paperwork to prove to the lender that the homeowner qualifies for a short sale payoff.
- While a first mortgage will be satisfied in a short sale, buyers also need to consider any secondary liens against the property.
- Lenders will more seriously consider short sale offers that are entirely in cash, with a 30-day-or-shorter closing and no contingencies.
- The seller or property owner cannot profit from a short sale.

What goes in a short sale packet?
Since the average layperson is not familiar with the many nuances and legalities of most real estate transactions, including short sales, working with a Realtor® who specializes in this area can save prospective buyers a lot of aggravation, time and money. Whether you go it alone, or seek professional help, Frankie Orlando, author of The Pre-Foreclosure Real Estate Handbook, says you will need to present the following to a lender for any short sale:

- Cover letter
- Purchase agreement
- Low comps list
- List of repairs with quotes for bids
- Photos of problems with the house
- Seller's hardship letter
- Net sheet (HUD-1)
- Financial information on seller (W-2s, tax returns, etc.)
- Your formal offer, with a time limit for acceptance.

For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings.  Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose so please call us to see if we may be able to help you with your short sale.

Home Mortgages

Cypress Property Solutions, LLC takes great pride in our levels of both quality and service by offering a wide variety of loan products at the most competitive market rates. We work with many organizations and have no obligation to any particular lender or service provider. Therefore, we provide objective advice to present you with the best options possible for your needs and situation. We empower our vast clientele of borrowers with the unbiased facts necessary to make well-informed financial decisions.

From loan closing and funding to mortgage processing and underwriting, Cypress Property Solutions, LLC, professionally and competently advances your transaction, all the while keeping you informed through every process milestone. We are have no priority higher than each client on an individual level, and are therefore highly committed to establishing satisfying, enduring customer relationships. Given this fact, you can feel entirely secure that you will receive the highest quality service and attention.

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