Definition and Process
The term “short sale” in real estate, is defined as a house which is up for sale, but at a lower price than the amount remaining on the mortgage. Short sale homeowner’s are usually in a financial strait situation, such as a major illness, job loss, or a divorce. Short sale homeowners, now must sell their homes, for far less than their mortgage amounts. A short sale is the better option than filing or going into foreclosure. Owners continue to own a house that is being sold as a short sale, unlike a foreclosure, where the lender or the bank becomes the owner.
Short Sales in Ann Arbor
Yes, a short sale is a negative for a homeowner’s credit, because it can appear on your Michigan credit report, as a pre-foreclosure transaction. If there is an advantage to a short sale vs. a foreclosure, it is that the homeowner is still in control of a sale and not a lender, but the sale proceeds go to the bank or lender. The laws in Ann Arbor, Michigan, supports the homeowner’s short sale process. The state of Michigan also encourages lenders and banks to work with indebted homeowner’s rather than go into foreclosure, which is not good for the real estate market in Ann Arbor.
Short Sale Support
The average Ann Arbor short sale closing time frame, is between 60 and 120 days, especially, when homeowners sign up for the federal Home Affordable Foreclosure Alternatives (“HAFA”) program. Under the HAFA program, short sale homeowners receive immediate feedback from bank lenders, even before they place their home on the market. When seller’s apply for a short sale, it is up to an Ann Arbor lender to approve their borrowers application. The Michigan HAFA rules, encourage lenders to free borrowers from repaying the monetary difference between the short sales price and the remaining loan amount, with no financial judgments against them.
Short Sale Closing
A benefit of the Ann Arbor HAFA program is in the closing transactions, where short sale homeowner’s can possibly receive $3,000 in moving assistance, because seller’s can not remain in the house. An Ann Arbor real estate short sale closings, includes the buyer, the seller, and the seller’s bank or lender representative. At the closing, the difference between a short sale and a standard realty closing, is that a lender pays the seller’s closing costs and not necessarily the buyer’s. However, short sale buyers can negotiate for some partial payment of their closing costs.
