A short sale is a pre-foreclosure residential real estate transaction where the owner of the mortgage loan, the lender or lien holder (hereinafter sometimes “Lender”), agrees to allow the home owner to sell his or her property for less than — or “short” of — the outstanding amount owed on the mortgage loan, and to release the property from the mortgage.
Homeowners who are “underwater” or “upside down” with respect to their mortgage loans, seek to sell their homes “short” to avoid the threat of foreclosure action and to lessen the credit damage that would accompany a foreclosure.
It’s not a subject we like to focus on, but with the current job losses affecting our community we have to seek the big picture.
Bakersfield-Delano, California Unemployment
The BLS reported that the unemployment rate for Bakersfield rose 0.2 percentage points in December 2018 to 9.9%. For the same month, the metro unemployment rate was 4.1 percentage points higher than the California rate.
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If you are thinking of selling your home because of financial difficulties and you anticipate a short sale, could be your best option if:
- Your property is worth less than the total mortgage you owe on it.
- You have a financial hardship, such as a job loss or major medical bills.
- You have contacted your lender and it is willing to entertain a short sale.
The first step to a short sale is to hire a qualified real estate professional who specialize in short sales. You want to work with those who demonstrate a thorough working knowledge of the short-sale process and who won’t try to take advantage of your situation or pressure you to do something that isn’t in your best interest.