You probably never envisioned yourself having to seek a short sale solution in order to avoid a foreclosure and financial ruin. At Diditan Financial we understand that qualifying for a short sale can be bitter-sweet. We like to think of ourselves as a home loan company with low rates that helps buyers own the home of their dreams, and sometimes this can be a journey where you have to take a few steps backwards to take a big leap forward.
What is a Short Sale?
A short sale is sometimes referred to as a pre-foreclosure, as it is generally a homeowner’s last option before having to go through the trauma of a foreclosure. Short sales allow people to sell their home for less than the remaining mortgage balance. Your bank holding the home loan has to agree to a short sale. This means you could use the proceeds to pay off a set amount to free you from having any financial responsibility, which could be all of the balance, or a portion of it. The financial contribution you make to the short sale of your home depends (if you have to make one) on a few contributing factors. A short sale is a life-saving alternative to foreclosure and could be your “re-start” button if:
- You are struggling with long-term hardships
- You have been denied a loan modification or refinance option on your mortgage
- You are upside down (owe more on your home than what it is worth)
- You have fallen behind on mortgage payments
- You aren’t able to sell your home for a price that covers the outstanding mortgage balance
- You can no longer afford keeping your home
At Diditan Financial people ask us, what is a short sale, all the time and we take great pride in assisting customers with finding straightforward answers to their questions. Short sales can be very stressful, and if there are no other solutions to avoid foreclosure, Diditan Financial will take care of you to make sure you go through one with the best terms, and a plan to get you back into a home quickly.
Should I Short Sell my Home?
Short selling your home is a much better option than going through a foreclosure. A foreclosure on your credit can prevent you from getting a job, buying another home, getting good rates on other investments like an auto loan, and they can even prevent you from renting a good property. Some times a short sale is the only way a homeowner can avoid foreclosure and prevent his credit from being destroyed. It is important that you let a company like Diditan Financial make sure your short sale application is handled correctly, and that the process and negotiating stages with your lender is handled appropriately, as a short sale done the wrong way can leave devastating results. That said, short sales are not a walk in the park; they are often wrought with stress and frustration, which is why you need Diditan Financial in your corner. If you are able to enter a short sale and you meet the above criteria, a short sale is likely your best option and you should certainly use it as a life preserver. The important thing to remember is this: a short sale is not the end to your dream of homeownership.
Short Sale Tips for Sellers
Selling your home as a short sale can create various pitfalls is you don’t know what you are doing. A successful short sale can be a godsend for homeowners unable to pay their mortgage, and while many think the most difficult part of the process is to getting the lender to bend and agree to take a hit, it is really just one step in many of a tricky process.
- Your Realtor – Would you hire a DUI lawyer to help you through the legal proceedings of settling a divorce? Of course not, and when it comes to a short sale you will want a realtor who is an expert at short sale properties. When ‘Real Estate Investment News’ asked Warren Buffet about the mindset it takes to form an influential sway with property investors looking at short sales, he said the realtor’s temperament is key: “You need temperament that neither derives great pleasure from being with the crowd or against the crowd”. Not only do you need a realtor who knows the ins and outs of short sale procedures and common trappings, he must have that attitude and philosophy that makes him a walking semblance of Switzerland–neutral, decisive, and pleasing to both sides.
- Know Your Crystal Ball – Most borrowers are so anxious to ditch their mortgage payments that they will enter a short sale without fully understanding what the future may bring based on the terms they agreed to during the sale of their home. Diditan Financial can help you look into that crystal ball and prepare you for a number of outcomes that are likely based on your actions. For example, if you failed to get the lender to waive the deficiency of your mortgage, they can come after you with a collection letter and a devastating hit to your credit after your property sells. Our experts at Diditan Financial can help you avoid a deficiency judgement by utilizing the Home Affordable Foreclosure Alternatives Program (HAFA). This is a federal program that exonerates the borrower from any deficiencies.
- Be Your Own Kissinger – Henry Kissinger is regarded as the greatest negotiator of the 20th century and he even won the Nobel Peace Prize for ending America’s involvement in the Vietnam War. Although you probably wont earn the Nobel Peace Prize for negotiating a short sale freeing you of any potential financial battles, you do need to be a sharp, relentless negotiator. With Diditan Financial in your back pocket you can negotiate a waiver or a term that frees you from the financial burden for an affordable price. This could be done by signing a promissory note for cents on the dollar in the form of payments, or one discounted lump sum. With Diditan Financial on your side, you will be a powerful negotiator, and the lender will never see you coming.
- Continue Giving Love to the HOA – Never stop paying your HOA fees while you are considering a short sale. Missed payments can butcher your deal, even if the buyer agrees to pay the past due fees sum. Remember, your lender is going to take a hit one way or the other, and having to pay back payments on HOA fees could add insult to injury. Also, the HOA has the ability to turn off the power and stop utilities and services from being rendered. You want your lawn mowed and your lights on when you go to sell the home, and you certainly don’t want it to look like a foreclosure.
- Seek Legal Advice – Even though our Diditan Financial team are experts at short sale proceedings, you owe it to yourself to have a lawyer take a look at the proposal before you sign it. We support our clients in getting as much education as possible through the short sale process, and when you are ready to move ahead and get a home, we will be here as your trusted home loan partners always looking out for your best interest.
Is a Short Sale the Right Thing to Do?
If you are exploring the option of a short sale, you are probably also facing a foreclosure. If you are unable to refinance your current mortgage or qualify for any other program, a short sale is definitely a better option than going into foreclosure. In order to determine if a short sale is the right thing for you to do, let’s first unearth the consequences of a foreclosure:
- Major ding in your credit score – According to FICO, a foreclosure can lower your credit score by as much as 160 points. Also, the higher your credit score was to begin with, the greater the point loss.
- 7 is not always a lucky number – 7 entire years; this is how long a foreclosure stays on your credit score.
- Housing challenges – Though its not impossible, having a foreclosure on your record can make it very difficult to qualify for another mortgage to buy a home. Realtor.com advises prospective buyers to wait at least three years after a foreclosure before trying to get another home loan. Having a foreclosure on your record can also make you unattractive to landlords. In most cases a landlord will require proof of income, and a security deposit worth three times your monthly rent.
- Horrible rates everywhere else – If your credit score was 750 and then a foreclosure lowered it to 590, just try buying a new car. You can expect to pay $5000 down on a $40K car with an interest rate of 24 percent. Even cable TV companies and Internet companies may require a deposit for their equipment, and utility companies will also generally impose a large deposit.
- Blown Employment Opportunities – There are many employers (namely corporate level positions) that require good credit as a prerequisite for employment consideration.
As you can see, a foreclosure can throw a number of obstacles into your life’s journey leaving you stranded by the roadside. If you are facing a short sale, let Diditan Financial explore your options and we will work around the clock to make sure your future is secure, you are free of financial responsibilities from the short sale property, and we will monitor your credit through the entire process. We get it, your home is where you have some amazing family memories, and as a result, it can be hard to let go of the place where your son took his first steps, or where you had so many amazing holiday meals with family. Now consider this: a successful short sale will guarantee new memories, in a new home, when you are ready, and when the time is right.
Who can Help Me With a Short Sale?
If you need help listing your home in a short sale, Diditan Financial is your best option. First, we put our real estate team to work analyzing your situation to first determine if you can avoid a short sale and keep your home. There have been several cases in which homeowners have come to us after banks and financial lenders have deemed their circumstance an impossible one in terms of refinancing their home loan, yet our experts found a way. Although we can not guarantee you will be one of these people, we can attest that our mission is to work around the clock in teams until we have the best possible solution that will either keep you in your home, or set you up to own a home again, with a better loan, in a short period of time. In some cases, a short sale is the best thing for a homeowner because it gets them out of a bad loan, frees up their money, and sets them on the right path to home-ownership longevity. Give Diditan Financial a call today, and let’s work hard to create an ideal solution to a stressful problem.