Understanding Short Sales For Your Honolulu Property

by Sep 30, 2021

In today’s economy, it’s not uncommon for many homeowners with a mortgage to sometimes miss their monthly payments. There’s often some leeway, but when you miss enough payments, you may be served with a notice of default which means a foreclosure is imminent. If you’re facing a foreclosure in Honolulu, don’t fret for there are several options available to you.

The first thing that’s recommended is talking to your mortgage lender and seeing if there are other ways for you to get back on track on your payments. But if you’ve already spoken with your mortgage provider and still find it difficult to keep making payments, there are other options for you like selling your home before you reach foreclosure. You can try a short sale for your Hawaii property or maybe even find a cash home buyer in Honolulu.

Understanding The Short Sale

To put it simply, it’s when you sell your home for less than what you owe your mortgage provider. It’s called a “short” sale because the bank or loan provider is taking a short position, or a loss from this sale. Now why would a mortgage provider be okay with taking a loss? The fact of the matter is, sometimes it’s much easier and more beneficial to the lender to take a loss and close the books on your debt rather than going through the whole process of foreclosing your home and having to sell the property through an auction or more traditional means. With the time they save and the money you used to pay off your mortgage, they can provide more mortgages to new clients. However, short sales aren’t automatic and aren’t always granted. You’ll need to talk to your mortgage provider and convince them to accept a short sale on your Hawaii property.

What To Do In Short Sales For Honolulu Properties

Ironically, the process of a short sale can take quite some time. It all starts with a buyer’s offer being submitted to the seller, who decides whether they will accept. When the seller and buyer reach an agreement, the offer is accepted, and the seller’s agent will send the offer package to the mortgage provider.

The mortgage provider will go through their own review process and see if the offer package is acceptable to them. They may accept the offer, reject it, or come back with a counteroffer. Any other additional lienholders will also need to be consulted and this can make the process long and complicated. Once all the lienholders accept the offer, the seller will see if their terms are acceptable. If the seller is okay with these, escrow is opened, and a normal escrow process begins.

Caveats In short Sales In Honolulu, Hawaii

Aside from getting all lienholders to approve your short sale, there are several other things to remember if you want to take this route. The first is the buyer’s right to cancel a short sale offer. In Hawaii, there are contracts that allow a buyer to cancel their offer any time before receiving a notice that the seller has accepted the lienholder approval of the short sale. Be open to backup offers from other buyers to ensure you will have other offers to fall back on. It’s not uncommon for the buyer who closes on a short sale to be the second or third in line.

Another thing to look out for is the time expected to close on the sale. Often the lienholder will expect the closing to happen within 30 days of their approval. This is fast considering it normally takes 45 days to close in Hawaii. Good news is you can always ask your mortgage holder for an extension, especially if the process is ongoing without any problems.

Ready To sell Your House?

Whether you want to go for a short sale of your Hawaii property or look for a cash buyer to sell your house quick, both options will provide you with the best impact on your creditworthiness. While a foreclosure can impact your credit score negatively by over 300 points, a short sale will only affect it by around 100 points, and you might still be able to get a loan for a new home within 2 years. Another great option is contacting RC Property Group for a reputable cash home buyer in Honolulu. We’ll give you a fair offer for your home and help you close a deal quick and minimize any negative impact. Contact us today to learn more!

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