A Short Sale Guide to Northern Nevada
Information to Assist Buyers and Sellers in Navigating the Short Sale Scene
The Farmer Moylan Team is not new to Short Sales. When it was identified in 2008 that our community was increasingly seeing homeowners in "distress" that needed a reliable, trustworthy resource, we became that resource. Teri Farmer is a Certified Distressed Property Expert and we utilize a full team to ensure that your needs as our client are met.
If you are experiencing financial distress and need to sell your home, you are not alone! And if you are in the market to purchase a home, a short sale may become a necessary option to consider. In any market, there always exists homes or homeowners who are distressed. In a healthy market, it is not unusual for 1-3% of homes to be distressed. In a declining values market, that number is much greater.
Defining Distressed Properties
*Property that is in poor physical condition
*Property that is or will soon be in some stage of the foreclosure process
*Property that has an owner who is experiencing a period of financial instability
*Property that is "upside down" where the mortgage is higher than current market value, and the owner must sell
Information to Assist Buyers and Sellers in Navigating the Short Sale Scene
The Farmer Moylan Team is not new to Short Sales. When it was identified in 2008 that our community was increasingly seeing homeowners in "distress" that needed a reliable, trustworthy resource, we became that resource. Teri Farmer is a Certified Distressed Property Expert and we utilize a full team to ensure that your needs as our client are met.
If you are experiencing financial distress and need to sell your home, you are not alone! And if you are in the market to purchase a home, a short sale may become a necessary option to consider. In any market, there always exists homes or homeowners who are distressed. In a healthy market, it is not unusual for 1-3% of homes to be distressed. In a declining values market, that number is much greater.
Defining Distressed Properties
*Property that is in poor physical condition
*Property that is or will soon be in some stage of the foreclosure process
*Property that has an owner who is experiencing a period of financial instability
*Property that is "upside down" where the mortgage is higher than current market value, and the owner must sell
Information for Sellers
If you should decide that a short sale is the option for you, the process is not unlike a normal transaction, with some additional required steps to the process. When consulting with a Realtor, you should review and understand your options as well as your responsibilities prior to placing the home on the market.
One of your responsibilities will be to gather the necessary documentation required to present a "hardship" to your lienholder. Our team has created a Short Sale Required Document Checklist for your convenience.
Defining Hardship
When homes are purchased, the buyer must qualify for the loan. When pursuing a short sale, it is necessary for a homeowner to be upfront regarding their personal and financial status an in essence to "un-qualify" for the loan. A hardship is a material change in the financial situation of a homeowner that is or will impact their ability to pay their mortgage.
Examples of Hardship Reasons Lienholders May Consider for a Short Sales:
*Property in poor physical condition that the homeowner cannot cure
*Property that is or soon will be in some stage of the foreclosure process
*Mandatory job relocation
*Extended military leaves
*Divorce or separation
*Property that has a homeowner experiencing a period of financial instability (often due to job loss or medical expenses)
A short sale is a way to avoid foreclosure. It is not a means to simply get out of a mortgage for a dissatisfied homeowner. The seller must show that they have a valid financial hardship and are unable to pay their mortgage.
A homeowner must also understand that just as there are consequences to a experiencing a foreclosure, there are also consequences to any option to the foreclosure, including a short sale. It is important to understand that there may be tax, credit, legal and deficiency judgement consequences following any alternative to a foreclosure and any facing this situation should speak not only to a Realtor who is a Certified Distressed Property Expert about how to pursue the short sale, but should also speak to legal and tax professionals regarding any consequences to their unique situation.
If you should decide that a short sale is the option for you, the process is not unlike a normal transaction, with some additional required steps to the process. When consulting with a Realtor, you should review and understand your options as well as your responsibilities prior to placing the home on the market.
One of your responsibilities will be to gather the necessary documentation required to present a "hardship" to your lienholder. Our team has created a Short Sale Required Document Checklist for your convenience.
Defining Hardship
When homes are purchased, the buyer must qualify for the loan. When pursuing a short sale, it is necessary for a homeowner to be upfront regarding their personal and financial status an in essence to "un-qualify" for the loan. A hardship is a material change in the financial situation of a homeowner that is or will impact their ability to pay their mortgage.
Examples of Hardship Reasons Lienholders May Consider for a Short Sales:
*Property in poor physical condition that the homeowner cannot cure
*Property that is or soon will be in some stage of the foreclosure process
*Mandatory job relocation
*Extended military leaves
*Divorce or separation
*Property that has a homeowner experiencing a period of financial instability (often due to job loss or medical expenses)
A short sale is a way to avoid foreclosure. It is not a means to simply get out of a mortgage for a dissatisfied homeowner. The seller must show that they have a valid financial hardship and are unable to pay their mortgage.
A homeowner must also understand that just as there are consequences to a experiencing a foreclosure, there are also consequences to any option to the foreclosure, including a short sale. It is important to understand that there may be tax, credit, legal and deficiency judgement consequences following any alternative to a foreclosure and any facing this situation should speak not only to a Realtor who is a Certified Distressed Property Expert about how to pursue the short sale, but should also speak to legal and tax professionals regarding any consequences to their unique situation.
Information for Buyers
If you are in the market to purchase a home, chances are, you've been exposed to short sale properties. A Short Sale is NOT a foreclosure. When you are looking at potential short sales, you are viewing properties still owned by an individual, not by the bank. But if you make an offer on a short sale listing, it will become necessary for the owner to get the bank (a.k.a. "lienhonler") approval on the offer.
A common misconception is that you are not "under contract" until the bank approves the sale. This is not true! Once both the buyer and seller sign the purchase agreement, they are under contract and the sale is simply contingent upon the bank's approval.
A short sale transaction does take extra time, and you must have the patience needed for this process as on average it may take over 3-4 months between the time that an offer is made and you are living in the home. Depending upon what you are seeking in a new property, you may find it difficult to avoid short sales, so you need to work with a Realtor who is great at communication so that you are always educated to make the choices that are right for you and so that you are constantly updated on the status of the short sale.
If you did not find the information you are seeking, please email [email protected] for information regarding short sales in Reno, Sparks and the surrounding Northern NV areas.
To schedule an appointment with our team to discuss listing a home as a short sale, please email [email protected] or call 775-338-0353 or 775-830-3877.
