What is a Short Sale in Virginia Beach?

By mikerbrady

When you’re looking to sell your house in Virginia Beach, you’ve got a few options to consider. However, if you find yourself in a situation where you’re behind on mortgage payments and unable to keep up, your options get a bit more limited. If you want to avoid foreclosure or losing your house to the bank, you can reach out to a home buying company like Avante Home Buyers to find out how we can help. Another option is to consider a short sale. Let’s take a closer look at what a short sale is in Virginia Beach and if it’s the right option for you.

How To Deal With Short Sale In Virginia Beach

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What Is a Short Sale?

The first thing to do when discussing short sales is to understand what, exactly, they are. Basically, a short sale is defined as when a homeowner in financial distress sells their house for the amount that is currently due on the mortgage. The buyer of the property is considered a third party in the transaction and all of the proceeds of the sale go directly to the lender or bank. 

With the short sale, the lender will either forgo any remainder on the mortgage or they will get a deficiency judgment, which requires the original homeowner to pay all or some of the leftover amount between the short sale price and the full value of the mortgage. If the lender releases the seller from the remainder of the mortgage, they are able to walk away from the house and the loan. It is common for a lender to release the borrower from any remainder on the loan if this is the first time they are using the short sale route. 

Why Is it Called a Short Sale?

The reason it is called a short sale is that your Virginia Beach house will be sold for less than the remainder of the mortgage balance. So the sale amount is likely to be “short” of the full loan balance. So if you are selling a house for $100,000 but there is still $150,000 left to pay on the mortgage, there is a deficiency of $50,000, not including closing costs and other costs, that will need to either be paid by the borrower or forgiven by the lender. 

Why Are Short Sales Attractive?

A short sale can make a lot of sense for a homeowner in Virginia Beach who has fallen behind on their mortgage because it helps you to maintain some bit of control over what happens next. You get to list the house accordingly and accept the offer you want for it. If you’re able to find an offer high enough you might just satisfy the full outstanding amount of the mortgage loan. 

Also, when going the short sale route in Virginia, you are going to make less of an impact on your credit report than if you simply let the house go into foreclosure. That not only reduces your liability but it also makes it easier for you to qualify for a new loan very soon. If you go into foreclosure, that could keep you from being able to borrow money to buy a house for as much as seven-to-ten years. 

Why Do Banks Likes Short Sales?

You might think that a bank wouldn’t want you to sell your Virginia Beach house in a short sale since it’s unlikely the proceeds will make up for the full amount of the loan. However, lenders are often agreeable to them because they would prefer to get some or most of their money back now instead of going down the road of a foreclosure, which can be time-consuming, messy, and end with them having to deal with recouping the money from the original loan themselves. 

Why Is a Short Sale Preferable to Foreclosure?

As previously mentioned, foreclosure wreaks havoc on your credit and will make it extremely hard for you to qualify for a home loan in the near future. Plus, the lender may have the right to come after you for the balance owed on the loan even if they repossess and sell the house themselves. 

A foreclosure happens when a lender takes control of the house after the borrower fails to make payments for a long-enough series of months, sometimes as little as three. If the house goes into foreclosure, the borrower no longer has a say in what happens with the home sale. The lender or bank will move forward themselves to sell the house in the hope of closing the gap between the full amount of the loan and what remains unpaid. Sometimes a foreclosure will take place after the homeowner has left the property. However, if they remain in the house at that time they are subject to eviction. 

Most foreclosures in Virginia are non-judicial, which means they do not require a court hearing in order to process them. Usually, mortgage documents will say that the lender has the power of sale, which gives then the right to sell the house if the borrower doesn’t make payments on the loan as scheduled. These kinds of foreclosures move quickly, so if you can avoid them and the problems they cause, you should do that. That’s why you should contact Avante Home Buyers to see how we can help. 

Is There an Alternative to Short Sales?

If you want to avoid foreclosure or going through a short sale in Virginia Beach, you can speak with your lender about a potential loan modification. This would mean the lender agrees to “restart” the loan, so to speak, and gets you back on track, presuming you make the next agreed-upon payment on time. Lenders can be open to this as they prefer to avoid foreclosure whenever possible as well. Be forewarned, however, that if you miss payments after a loan modification, the lender is very likely to move on foreclosure and not give you another chance. 

If you have private mortgage insurance (PMI), you might also be able to avoid foreclosure. Those who purchase homes with less than 20% down are often required to purchase PMI along with the house. If the PMI lender thinks that you have a decent chance of recovering from the financial situation you are currently in, they might give you advanced funds that you can provide to your lender that will cover the missed payments. Of course, you’ll have to repay that advance and also stay current on mortgage payments, but that’s a way to stay afloat if your financial concerns are short-term. 

Sell As-Is to a Cash Home Buyer

If it feels like foreclosure is imminent and you don’t want to deal with the ramifications of a short sale, you can sell your house as-is to a cash home buyer like Avante Home Buyers. Not only will we work with you on a solution to buy your Virginia Beach house ahead of foreclosure or any other financial situation, but we will pay you cash for your house quickly. 

The process begins when you contact us. Tell us about the current situation with your Virginia Beach house that you need to sell fast. We will ask for all of the important information and we may come to visit the property to take a closer look. We’ll present you with a fair offer and you can consider it as fast as you like. No matter what, there is no obligation to accept the other. 

If you decide you want to move forward, you decide when you want to close and sell the house on your own terms. We’ll put cash in your hands and we’ll handle the Virginia Beach house from here on out. You get to settle your financial situation and move forward with your life. It’s a great deal for both sides that makes your life a whole lot easier.