Escondido short sales are really not as bad as the media leads you to believe. If you are a home owner and you live in the city of Escondido and you need to sell your home right now, it is possible that you may need to participate in a short sale.
A short sale is a real estate transaction in which a home owner sells the home for what it is worth right now—even though the home owner may owe more to the bank than the home is worth.
Here is an example:
Say that your Escondido home is listed as an Escondido short sale and it is worth $250,000. You hire a qualified Realtor® and list the property. You receive an offer for around $250,000. The problem is that there are mortgages on the property in excess of $250,000.
In a situation such as this, the mortgage lender (or mortgage lenders) agree to accept $250,000—even though the debt owned to them is much more. In many cases, the bank will agree to settle the debt for this amount. The bank will then put the agreement in writing on a document called an approval letter. With this approval letter, the Escondido short sale can close escrow—despite the fact that the loan balance is higher than the purchase price.
In 2007, our government passed the Mortgage Debt Relief Act of 2007. This particular act is designed to aid borrowers who participate in a short sale by providing some tax relief. Prior to this act, a seller who participated in a short sale, would have been responsible for the taxes on the debt forgiven. Now Escondido short sale sellers have the benefit of the Mortgage Debt Relief Act of 2007 when considering listing their property as an Escondido short sale.
In April of this year, our government also enacted a program called HAFA that provides short sale and deed-in-lieu of foreclosure options and incentives to distressed borrowers. Both of these policy changes and programs have tried to aid borrowers that may be facing foreclosure in the future.
There is a lot of hype in the media about how terrible short sales can be. But, it’s really not that bad. Many banks now have programs that make the short sale transaction and the short sale process more efficient. It is true that the short sale process can be slow. This is due, in part, to the fact that the banks do not have enough employees to manage the sheer volume of short sales that have come their way.
That being said, when you hire a qualified Realtor® to list your property as an Escondido short sale, you reap the benefits of experience. Agents who are experienced at working short sales can help to make the process move more quickly and efficiently.
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