(Originally Published  September 9th, 2010)

Short SaleNobody ever wants to learn about foreclosures and short sales.  Unfortunately, some folks are forced to get deep into the distressed property world – whether that’s through divorce, job loss, or other hardship.  With the economic downturn, more and more people are learning about foreclosures; you get behind on your mortgage payments and the bank tries to reclaim your home.  The bank never wants to foreclose on your home – it involves lawyers, hefty fees, and hurts a lot of people in the process.  But it is the only way to regain a home where borrowers have stopped paying.  One way to avoid foreclosure in Fort Collins is to negotiate a short sale.

Short sales are negotiated between the lender or bank and the borrower (homeowner) with help from a Realtor working for the homeowner.  Instead of forcing foreclosure on the property due to lack of payment, the homeowner and the lender mutually agree to try and sell the home at a discounted price, where the homeowner turns over all the proceeds to the lender.  In Fort Collins, avoiding foreclosure with a short sale is your first and best option.

A Short Sale in Fort Collins will Benefit the Lender

  • The lender will end up with more money (net proceeds) in a Short Sale
  • Foreclosures in Fort Collins take much longer to process than Short Sales
  • Lenders will pay less in attorney and legal fees with a Short Sale

A Short Sale In Fort Collins Will Benefit the Home Owner

  • Because short sales move faster, there are less missed mortgage payments
  • Credit damage is lessened with a Short Sale
  • Home Owners can move into a more affordable living situation sooner
  • Home Owners can buy a house within 18-24 months with a short sale, up to 48 months with a foreclosure
  • All closing fees, Realtor Commissions and associated costs are paid for by the bank  in most circumstances

ForeclosureThe biggest downside to a short sale in Fort Collins is the amount of time, effort and energy required to process the transaction.  A short sale requires the seller to be very involved in providing paperwork, and being accountable once the home is under contract.  In most cases, there is a deficiency, which is the amount of money still owed to a bank after closing your short sale.  In some cases, the borrower can still be on the hook for that money, unless during the short sale process they receive notice that all remaining debts are waived.  In my experience negotiating short sales in Fort Collins, remaining balances are typically waived if the short sale is approved.  Lenders typically have loss mitigation departments to deal with short sale offers.  Their loss mitigation departments usually have a set of criteria including amount of equity and anticipated sale price that they use to evaluate the potential in short sale offers.

Life will sometimes throw you curve-balls.  If you in Fort Collins, Loveland, Greeley or anywhere in between and owe more than your house is worth, a short sale can work for you.  Let us help educate you, so you can make the right decision for you and your family.

Ascent Real Estate Professionals are committed to bringing you useful information, timely advice and expert service whenever you need it.  Whether it’s Fort Collins, Loveland, Windsor, Greeley or anywhere in between, we’ve got Northern Colorado covered.  Feel free to contact Ascent or subscribe to our newsletters and market reports.  Any questions or inquiries you might have will be responded to in a timely manner.