In the past, Southern California home sellers needed to prove a hardship to complete a short sale. In recent months, many homeowners have completed short sales without a hardship.
So What Has Changed?
The motivation of many homeowners who want to start the short sale process is that their mortgage balances have suddenly become higher than the value of their homes. Essentially, they owe more than their homes are worth. Instead of waiting until they are in financial distress, these sellers hope to avoid paying an inflated home loan waiting for their home value to recover, and possibly protect their credit rating at the same time.
What is a Short Sale Hardship in Southern California?
Sometimes a financial hardship is a matter of your lender’s perception. A hardship is defined as a condition that is difficult to endure, either financially or emotionally. It may involve a form of distress, suffering or income loss.
Most lenders will consider the following hardship conditions:
- Unemployment
- Reduced income
- Illness or medical emergency
- Job transfer (voluntary or involuntary)
- Divorce, separation or marital difficulties
- Military service
- Death in the family
- Incarceration
- Increased expenses and excessive debt
- Unexpected repairs or home maintenance
What Are Your Short Sale Options if You Aren’t Experiencing a Hardship?
Your simplest solution is to apply for a loan modification to reduce your principal balance below the home’s market value. If you’re request for a loan modification is rejected, you can move forward with your short sale plans.
The easiest way to start a strategic short sale is to write a strong and honest hardship letter. You need to focus on your reasons for wishing to short sale your home, and how you plan to do everything you can to find a seller that will pay the highest amount possible. You might want to include any upgrades you might complete, or the methods you will use to market your home to qualified buyers.
Here Are Some Strategic Short Sale Tips:
- Hire an experienced strategic short sale listing agent.
- Talk to a lawyer who specializes in Southern California real estate short sales.
- Obtain competent tax advice about possible tax consequences from an Accountant.
- Price your short sale in line with the comparable homes in your area.
- Contact your lender to find out how to fill out and submit your short sale paperwork.
Will Banks Let Sellers Walk Away from Your Southern California Home Without a Hardship?
The answer to this question really depends on your lender. More often than not, the short sale is granted. A hardship is not always necessary because sometimes the bank prefers to dump the property than risk taking it in foreclosure.
Honestly, there is no guarantee that the bank will accept your short sale request, with or without hardship. Every lender is different. And if you are working with two different lenders, your situation is even more complicated.
If you have more questions about the strategic Short Sales, feel free to contact me @ 562-364-9505 or mark@shandrowgroup.com
Sincerely,
Mark Shandrow
Real Estate Broker
office 562-364-9505 ext 100
mark@shandrowgroup.com
Shandrow Group
3970 Atlantic Ave., 210
Long Beach, CAÂ 90807
follow my story at http://markshandrow.com
