Hoemowners and homebuyers in today's real estate market face unique challenges. Of special concern are issues such as foreclosures and short sales.
Many homeowners facing rising interest rates on their sub prime rate mortgages and flat or falling home prices, are being advised to use a short sale to help them out of the difficult situation of mortgage delinquency or foreclosure. However, in my contact with the public, I'm finding many who really have no idea what a short sale is.
So, what is a short sale?
A short sale is an "arrangement" between the current owner of a home and the current mortgage lender holding the mortgage to accept an offer for less than the total amount owed to pay off the home loan which also includes other obligations such as closing costs, property taxes, transfer tax, and/or commission.
This "arrangement" may even help you if you find yourself in life changes, such as a divorce or job transfer which may force a sale of property. Perhaps you find yourself in an "upside down" situation, meaning that you owe more than you can potentially realize from the sale of your home.
As always, if you are considering a short sale, or any real estate transaction, it is important to seek competent legal and financial professional advice. Be sure you deal with a real estate professional with experience with short sale transactions.
The Maryland Association of REALTORS has created a Resource Guide to assist you in meeting the challenges of potential foreclosure. It includes general information about foreclosure and "short sales", as well as articles, publications and useful links. Go to www.mdrealtor.org and link to "Legal Affairs" Consumer Short sale and foreclosure Overview.
Now, if you are a buyer of a property being sold in a short sale, there are several key issues you need to be aware of. I will discuss this on my next blog. So stay tuned.