Is A Short Sale Right for A Struggling Orlando Homeowner?

In today's crumbling real estate market, many homeowners in the Orlando area are struggling with monthly mortgage payments and may soon face foreclosure. Negotiating revised loan terms would appear to be a good option however loan modifications are failing for many borrowers within a few months of the new arrangement. Another option to consider as a better choice is arranging a "short sale" with the company holding the mortgage. A short sale means the lender will accept less to pay off the loan than the balance owed. In most instances, the mortgage company will only negotiate a short sale through a licensed real estate agent and will not work directly with the homeowner. An experienced short sale agent will know how to work successfully with a lender and guide the homeowner through the process.

What Documents Does the Seller Provide for A Short Sale?
To begin the process, the lender may ask the agent to have the homeowner supply documents similar to what was needed to qualify for the loan initially, but this time for the opposite effect. These documents will prove that the borrower can no long make payments. They may include:

• A hardship letter detailing the reasons for the homeowner's declining financial situation. A few of the common reasons are:
  • Loss of job or reduction in pay due to cutbacks.
  • For business owners, loss of revenue or closing.
  • Loss of income due to health problems.
  • Death of a spouse.
  • Medical bills that are financially overwhelming.
  • Separation or divorce.
  • And, inability to pay because of increased payment due to interest rate adjustment or other bad loan program.
• Recent financial documents such as paycheck stubs, bank statements, investment accounts and/or proof of unemployment to demonstrate reduced income.
• A statement giving the lender permission to check credit bureaus and personal financial sources.

What Action Is Required of the Seller During A Short Sale?
Since lenders are agreeing to a loss on the property, they naturally want to sell at the highest price possible. They also want to protect the property's value during the short sale process. To achieve these ends, the lender may require the homeowner, now the seller, to agree to the following:

• List the property for sale with a licensed real estate agent.
• Maintain the property in good condition, including being responsible for minor repairs.
• Cooperate readily with agents to make the property available for showing to potential buyers.
• Not encumber the property with additional mortgages, credit lines, liens, etc.
• Vacate the property immediately on close of sale.

Does A Short Sale Affect the Seller's Credit History?
While a short sale may sound complicated and time consuming, it requires only that sellers act as responsible homeowners throughout the sales process. In return, the sellers benefit by not having to go through the foreclosure procedure, and, although some lenders may report short sales as paid off but not per agreement, the sellers do not have a foreclosure on their credit history which would remain there for at least seven years. A short sale affects credit negatively, but is still better, if only slightly better, than a foreclosure.

Is A Short Sale Right for Your Situation?
Find out today: If you live in Central Florida, contact The Orlando Property Group, your experienced short sales agents, specializing in real estate in Lake, Seminole, Orange, and Volusia Counties.

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If you are wanting to sell your Seminole County or Orlando area home in the next 6 to12 months, now is the time to begin putting your plan into place while time is still on your side. Please contact us for any real estate assistance you may need.

We're experts at putting people together with homes they love and can afford. Contact us today for information on Orlando and Seminole County real estate, Orlando & Seminole County homes for sale, Orlando & Seminole County relocation information, a free market analysis of your Orlando area or Seminole County home or statistics on homes in Orlando & Seminole County Florida or the surrounding Central Florida area, including Seminole County, Orange County, Lake County and Volusia County. We're always available to answer your questions.