The Kathleen Georgia housing market, like most of Middle Georgia, is expected to have an increase in Short sales over the next year.
While this is good for buyers and investors looking for a good deal, Short sales can be nerve raking for a seller. If a short sale becomes the only option for selling your house in Kathleen, this information will help make the process go smoother.
When the housing market in an area, like Kathleen Georgia, drops, it can force some homeowners into selling their house for less than they owe on the home loan. The owner has a choice of paying the difference of the sales price and what is still owed on the loan or do a short sale.
A short sale is the process of selling your house for less than what is owed, with the permission of the lender. This is a long process of working with a knowledgeable real estate agent and the lender. Depending on how the process is negotiated, the homeowner may or may not be held responsible for the unpaid balance of the loan after the closing.
A Short Sale starts with the bank
First thing to do in a short sale is call the mortgage company and find out what their requirements are for a short sale. For the bank, a short sale is an unemotional transaction. An owner, however, may be letting go of a property with great emotional significance. A real estate agent would be a good person to handle this part of the transaction. Have the mortgage company send a complete list all requirements for a short sale to be approved in writing (get everything in writing). The agent will need written permission from the homeowner to work with the bank.
If the loan payments are current and there are no other defaults on the mortgage, they may approve a loan modification with little effort, but this will not solve the problem at hand. Some loan companies require the borrower be in default for a couple months before they will approve a short sale. If this is the case, your only choice may be to let the loan go into default. Consult a professional before executing this move.
Next part of a short sale is proving the home value
The process of a short sale is selling a house for less than what is owed on the loan. This means your house in Kathleen has lost value since it was bought and buyers in the current market are not willing to pay enough to cover the loan balance.
To prove this to the loan company, they may require a BPO (Brokers Price Opinion) from a qualified real estate agent. This will tell the lender if the market value of your house has really dropped and how much.
Once the lender feels comfortable that the value of the house has really dropped below the loan balance, they will calculate a minimum sales price they will accept. When the lender makes this offer, it is a good idea to have your real estate agent negotiate to remove any ” deficiency clause” out of the agreement. A deficiency clause is part of the contract that says if the house sells for less than what is owed to the lender, you will pay the difference.
Example: you are selling a house that has a loan balance of $175,000. Buyer are only offering $150,000. If the lender agrees to a short sale of $150,000 payoff with deficiency clause attached, you will still owe $25,000.
Time to list your house for sale
Now that there is an agreed short sale in place, it’s time to sell the house. Many lenders will require a real estate agent list the property for sale as part of your efforts to sell the house.
Some lenders with also allow a price drop schedule as part of your selling efforts. Once your house in Kathleen has been on the market for a couple months, they will allow the price to be dropped again and so on. If the house goes under contract and sells, the short sale is completed. If it does not sell, you could be required to continue making payments until it does or withdraw the short sale agreement and not sell your house right now.