While not as prevalent as they were 10 years ago, you can still find some short sales in today’s Havasu real estate market. Unlike the name suggest, short sales are usually not a short term. They may take a little longer than other real estate in Lake Havasu. That’s important for both buyers and sellers to understand. But, for some homeowners, a short sale may be a more desirable option than a foreclosure. Why? read on to find out.
What is a Short Sale?
In this real estate transaction, the “short” in “short sale” refers to the bank forgiving part of the debt owed on the real estate in Lake Havasu. In other terms, paying the loan “short”. A homeowner may request a short sale when they owe more than the house is worth. This happened quite often in the late 2000s, when housing prices dropped dramatically in a short period of time. Let’s say, for example, that you owe $320,000 on your mortgage. The Havasu real estate market dictates that your house is only worth $285,000. That’s the amount your home appraises for. That’s all banks will be willing to lend to buyers for it. Therefore, you’ll be hard-pressed to sell it for more. If you really need to get out from under this house due to a death in the family, job loss, or other financial hardship, you may want to ask the bank to forgive the $35,000 difference so that you can proceed with a short sale.
What’s Involved in a Short Sale?
First, talk to your lender to see if a short sale of your real estate in Lake Havasu is the best option for you. Start by asking which department in the bank handles short sales. Then, request all the paperwork necessary to start the short sale procedure. Get all of your paperwork in order. After that, contact a real estate agent so that you can list your home on the Havasu real estate market as quickly as possible. Ask them how many short sales they’ve handled in the past. You want someone with experience. Any offer you receive must be approved by your mortgage bank first. That’s why it can take six months to a year for a short sale to be completed.
How Does a Short Sale Affect My Credit?
Homeowners will definitely feel a sting with their credit scores due to a short sale. Fortunately, though, it’s much less than with a foreclosure. After a short sale, you may be able to buy some other real estate in Lake Havasu without even waiting, providing your credit is in good standing and you have the funding to secure a new home loan. But, if you were in such dire straits to need to ask for a short sale in the first place, chances are more likely that you’ll be waiting a year or so before stepping back into the homeowner’s seat. Still, that’s better than waiting seven years for a foreclosure to come off your credit record.
If you do find yourself in over your head with your mortgage payments, talk to your lender. They may have programs to help pay your mortgage until you get back on your feet. Or, you may have to consider a short sale and go back to renting for a little while. There’s absolutely no shame in that.
Alexis Steel – 928-303-2199
Keller Williams Arizona Living Realty
Search homes at: www.TheHavasuHome.com