Short sales have been around for a long time, but have gotten a lot more attention in the last few years because of the recent economic crisis. A trend towards homeowners over-borrowing and banks over-lending combined with an increase in unemployment and housing prices falling to create a perfect storm in which people were unable to keep up with their loan payments. Though many people ended up in foreclosure, others have sought to mitigate their situation by asking their mortgage companies to cut their losses and accept a reduced payoff. Though the mortgage company ends up “short” of the amount of money that they expected to make from the loan – and actually short of what it loaned in the first place – it still ends up avoiding the higher costs involved in foreclosing, and is able to avoid having to sell the home itself.  The short sale process itself can be a challenge, as it involves not one transaction (as is the case when a person sells their home traditionally) but two: the buyer must agree to purchase the home at the seller’s price, and the mortgage company must agree to take less money than was originally contracted for. The law firm of Rothamel Bratton Attorneys at Law has extensive experience with the short sale process in New Jersey, and is able to act on your behalf to help facilitate this complex transaction.

There are a lot of steps involved in the short sale process in New Jersey. It begins with the homeowner putting together a packet that introduces the idea of the short sale and the reasons that it is needed. This usually contains financial information, including tax returns, bank statements and an explanation of the hardship that the homeowner is facing. At the same time, once a buyer is found for the house then the buyer has to submit an offer and the seller has to accept it. This part of the process is similar to a traditional home purchase, but includes the seller’s short sale package within the documentation. Once all of this has been submitted, the bank will check to ensure that it is complete and consider the applications. Unfortunately, it is very common for banks to delay in this process, and even to lose or destroy some of the documentation. This is one of the reasons that it is important to have an experienced legal representative working on your behalf.

In a short sale, a home inspection can be done, but because the sale is typically done on an ‘as is’ basis, the buyer will need to be willing to shoulder any repairs that need to be made. If not they can rescind their offer. While this process is going on, the bank should be making progress on their review of the transaction. It is important to remain patient, as short sales take a notoriously long amount of time, and banks often try to negotiate a better deal for themselves by submitting a counter offer.  Most short sales take about two months, but can take as long as six months.

If you are interested in purchasing a home that is being offered on a short sale, or in transacting a short sale on your own home, then having an experienced legal representative will work to your benefit. Call the law firm of Rothamel Bratton today for guidance and counsel.