Things You Must Know For a Successful Short Sale In Orlando

Things You Must Know For a Successful Orlando Short Sale

There are many elements that make up the short sale transaction, but there are actually only three vital qualifications for an Orlando short sale. Because of the relatively confusing and challenging nature of the short sale, there are many misconceptions as to what qualifications should be observed. The fact that it is one of the youngest areas of real estate also contributes to the confusion that even the most seasoned of real estate agents may find it difficult to competently close a short sale transaction.

When you look at the entire scenario, there are actually only three major qualifications that would really matter for both the lender and the seller. Considering that a short sale is one of the more advantageous options to homeowners facing default on their mortgages, there is immense value in understanding these vital qualifications. The services of competent Orlando short sale specialists would also go a long way to simplifying and fast tracking the transaction. These are the qualifications for a short sale that homeowners should be aware of.

• The Hardship Factor

Generally, Florida homeowners that look into the practicality and validity of the short sale transaction are facing some type of hardship that has led to the default of their mortgages. In many instances, they may be headed to an Orlando foreclosureproceeding, which definitely would be extremely disadvantageous compared to the short sale. It should be stated early on that all homeowners must qualify in order to convince the lender to agree to any short sale offer that has been tendered.

This begins with the declaration of financial hardship. Although one of the simplest portions of the short sale transaction, it is also considered by industry experts as the most critical. The declaration takes the form of the hardship letter, where the homeowner narrates using his own words the event or series of events that have led them to the default of the mortgage that resulted in their present financial incapability.

It is important to point out that financial hardship as it relates to the short sale transaction is defined as a verifiable issue. It has tremendous impact on the finances of homeowners that it has caused them to miss out on payments of the loan. As one of the qualifications for a Florida short sale, there are only a handful of hardships that are considered acceptable by lenders or banking facilities. Unless the experienced financial hardship falls under these acceptable ones, there is a huge possibility of the short sale offer being rejected.

Short sale specialists understand how to draft the hardship letter in such a way that it would highlight the plight of the homeowner and qualify them for short sale. This is done by using any of the acceptable hardships such as loss of job, loss of income, relocation (for whatever reason), illness of the borrower or the co-borrower, death of the co-borrower who qualified the loan, divorce or death of the spouse, and decline of the values in the local property market.

• Monthly financial deficits

Another one of the major qualifications for a short sale is when the lender is shortchanged on the mortgage. This means that the lender receives less than the complete amount that is due from the borrower or homeowner. For example, if the mortgage on a particular property is set at $100,000, and the property is only valued in the local market at $90,000, the lender is effectively shortchanged by $10,000, which equates to a loss instead of a profit.

You have to take into account that this figure does not include related expenses like commissions for real estate agents, escrow and titling charges, and recording fees among others. When Orlando homeowners face this upside down position, in most instances, lenders would want to get out as quick as possible with comparatively less damage as possible. This is why the short sale transaction becomes so effective and preferred, because it minimizes the losses for both the lender and the borrower.

The important thing to understand is that homeowners would need to substantiate these monthly financial deficits to qualify them for a short sale. The most effective way to do this is through a financial worksheet. Homeowners should readily realize that determining the existence of monthly financial deficits is not as easy as it sounds, which is why the services of short sale specialists are extremely valuable.

Although the formula of determining monthly financial deficits can be as simple as total monthly income less total monthly expenses, qualifying for the short sale is not as easy. This is because the figures need to be presented in such a way that lenders will be able to establish beyond the shadow of a doubt that the monthly financial deficits exists without any plausible solution based on existing assets of the Orlando homeowner.

• State of Insolvency

The third of the major qualifications for a short sale is establishing a state of insolvency. It is necessary for homeowners who want to qualify for a short sale transaction to be able to justify to lenders that there is no other way for them to meet their financial obligations than to sell the property. This means the ability of presenting to lenders the truth that homeowners owe more than what their assets can readily cover.

It is vital to understand that if lenders see any assets that can be liquidated to cover the outstanding mortgage, it will be pursued, and the short sale denied. It is equally important to establish the fact that the outstanding obligations are already due and contribute heavily to your financial incapacity. Keep in mind that it does not necessarily mean that homeowners have to file for bankruptcy or completely strapped of cash.

What should be established is that as this condition progresses, the more difficult, if not impossible, it will become for homeowners to keep up with their financial obligations. Homeowners should not be afraid of being disqualified if they have money in the bank; the important thing is to show that this money is barely enough to respond to your daily needs and expenses.

These three qualifications for a short sale may seem simple and straightforward, but preparing them can be extremely challenging, which is why the services of Florida short sale specialists are highly recommended.

Sandra is a Real Estate agent at Keller Williams Realty BK3248204, covering the greater Orlando area.
Phone: 845 401 4345
Email Me

I Help Orlando home owners avoid foreclosure with a short sale and reduce the number of foreclosures in Orlando. I am Sandra Giff and specialize in short sales in Orlando. I am your Orlando Short Sale Specialist Realtor and Orlando loan modification and distressed property expert. This article and content is for general informational purposes and may not be accurate. This should not be taken as legal advice, technical or tax advise under any circumstance. Seek legal advise and representation in all legal matters.

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