There are many challenges facing the Colorado homeowner or investor who needs to sell their personal residence or income property in today’s market.
We are presently experiencing one of the greatest reductions in market value in recent history. It no longer matters what you paid or what you currently owe on your property. The present value is only dictated by what a buyer is willing to pay for that property in today’s market.
In an ideal world a seller would enjoy an offer on their property which would fulfill the payoff requirements of the lien holders as well as pay all the typical seller’s closing costs and hopefully put a few dollars into their pocket. Unless there is substantial equity in the property, in the real world today that is not the typical situation sellers are facing.
Because of the flood of foreclosures and bank owned (REO) properties on the Colorado housing market today’s buyers are looking for a “deal”. Don’t be disheartened, there are many buyers in the market today and the savvy buyer knows that it is not necessary to pay a full retail value for a property.
A short pay or short sale may be available to a seller if a hardship can be established limiting the seller’s ability to continue to make their mortgage payments. Depending on the type of loan and federal requirements on certain types of loans short sales are available to most borrowers in today’s market.
The value of a property involved in a short sale is not determined by the price the borrower originally paid or the outstanding balance on the current loan. The present market value, determined by a current appraisal or BPO ordered by the lender, is how the value of the property is determined. This Present Market Value is generally below the loan balance owed to the lender and hence the lender will accept a short pay or short sale on their loan balance.
If you are facing a financial hardship, brought on by a job loss, illness or other family hardship, consider a short sale with your lender to provide relief from your high, unaffordable mortgage payments.