Selling at a Loss: Short Sales Explained

Myrtle Beach Real Estate Agent Helps With Short SaleSo many families in the Myrtle Beach have faced situations over the last few years where it is better to cut your losses and get out of Dodge. We all invest a lot of ourselves in our homes and the loss of a home can be devastating. This is the reason that many home owners wait until it is almost too late when deciding to sell. If you are considering downsizing due to out-of-control costs or if you are in a position where you have to sell your home, you will want to be sure and enlist the help of a Myrtle Beach Real Estate agent. Look for an agent who has experience in short sales and can sympathize with your situation.

If your Myrtle Beach home is currently worth less than what you owe the mortgage company, then a Myrtle Beach real estate agent will be familiar with all the procedures and red tape and will be in a position to guide you through the many aspects of negotiating a short sale. You have probably heard the term “short sale” many times. It simply refers to the situation where the current Myrtle Beach market value of your property is less than what you owe – causing a sale that is “short” of what you owe.

Due to past financial practices in the banking industry, most of the housing market in the United States has suffered a drastic decrease in the value of existing homes. Fortunately, most of these practices have been rectified and the industry is reporting a light at the end of the tunnel so to speak. Existing home sales have increased and the inventory of homes is on the decline.

Many home owners are not in a position to take advantage of the lowest interest rates in recent mortgage history. Combine that with the increase in food and gas prices and it is impossible to stay within your budget and keep your current home. If you are considering a short sale, you need to understand that this is different than selling your home under normal circumstances.

Differences Between a Myrtle Beach Short Sale and a Conventional Sale

In many instances with a conventional sale, the mortgage holder won’t even know the home is on the market until they lawyer calls for a pay off balance on the mortgage. With a short sale, the mortgage company has to be in on the sale from the beginning. There is also considerable more paperwork with a short sale than a conventional sale and this is where a Myrtle Beach real estate agent can be a big asset.

The first thing you must do in a short sale is give your mortgage holder permission, in writing, to communicate with your Myrtle Beach real estate agent. Next you will need to document all of the reasons you can no longer pay the monthly mortgage on your home. This is referred to as “proving hardship” and you will need to include bank statements, proof of income such as W-2’s, credit card and other bills.

Keep in mind that the statement of hardship does not relieve you the homeowner of the responsibility for the debt. It is up to the lender to determine if they will absolve any remaining balance. Your attorney can ask the mortgage holder to “forgive” the balance. Many lenders will accept a short sale as an alternative to foreclosure to avoid having yet another home on their inventory and avoid the expense associated with a foreclosure.

Many homeowners don’t realize that if a mortgage company has too many foreclosed homes on their books they can jeopardize any future loans from being insured. This is a huge incentive for the bank to cooperate with a short sale.

Even if the debt is “forgiven” a short sale will still affect your credit rating. However, the hit to your credit is usually not as great as a foreclosure. The mortgage company is required to issue a 1099 for the amount “forgiven.” This may cause an adverse affect on your tax return. Currently, the federal government is not taxing the difference, however, this could change by the end of 2012 when the law expires.

As with other areas in your life, compromise and patience will go a long way when working with your lender on a short sale. This type of sale usually takes considerably longer than a conventional sale and finding a buyer that is also patient can be difficult. By working with a Myrtle Beach real estate agent, you can drastically cut down on the length of time this takes.

Here is what one of our customers had to say:

“Jerry and his team did a fantastic job of short selling our condo for us. We had an offer is less than 2 months and the process with the bank went flawlessly. Everything they said they’d do, they did. We’d like to sincerely thank Jerry and his team for all they did for us and helping us to move forward. We would highly recommend him and his team without any hesitation.” Dave & Ruth Buell

We would love to be our Myrtle Beach Real Estate Agent of choice! We can help.

Jerry Pinkas Real Estate Team
854 Frontage Road West, Myrtle Beach, SC 29577
(843) 839-9870 ‎
homeguidemyrtlebeach.com

 

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