What is a Short Sale?

Many people behind on their mortgage (and nationwide it is 1 in 10 households) think foreclosure is their only option.  Very few talk to a Realtor who has been trained in short sales about their options to save their credit while selling their house.

A short sale is when you owe more on your mortgage than your property is worth, and the bank agrees to accept less than what you owe them when you sell.

A successful Short Sale can impact a credit score by as little as 50 points if all other payments are made.  The effect of a short sale on credit can be as brief as 12-18 months vs. at least 10 years for a foreclosure.  Foreclosures also affect credit by lowering a score by 250-300 points.

The qualifications for a short sale include any or all of the following:

• Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
• Monthly Income Shortfall – “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
• Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

Steamboat Springs saw a huge price increase and a record real estate year during the last year of free lending.  Those mortgages are now being re-set and more people are falling behind.

The short sale process requires a lot more work than a straight sale.  If  Steamboat homeowners behind on their mortgage are able to get out from under the burden of debt while maintaining their credit score, it could be worth it.

Please contact us at 970.819.6372 to talk about your options.  All inquiries will remain confidential.