From Equity to Short Sale: How a Homeowner's Passing Triggered a Real Estate Solution

Short sales in real estate are a type of transaction where a homeowner, with the approval of their lender, sells their property for less than the amount owed on their mortgage.
The purpose of a short sale is to avoid foreclosure, which can be detrimental to both the homeowner and the lender. In a short sale, the lender agrees to accept the proceeds of the sale as payment in full, and the homeowner is released from any further mortgage obligations.
In this case my client's father purchased a home a few years ago and recently passed away. Their property had experienced a decline in value over the past several months, resulting in a loss of any gained equity. This loss in equity triggered the need for a short sale on the property.
My client's son was able to swiftly act on behalf of the estate without court approval or intervention because his father had taken the appropriate steps before his untimely death by putting the home and his assets in a trust and assigning him as the executor of his estate.
NOTE: When you don't leave a will AND a trust and need to sell, the county courts can intervene and the process of probate determines who acquires your property. This can be very lengthy, a year on average.
To complete the short sale, my client's son worked with me and the mortgage holder of the bank to obtain approval for the sale. I listed the property for sale, and potential buyers submitted offers. The offers were then presented to the lender for approval, as the lender needed to agree to the sale price. The offer was submitted at the top of last week and on Friday the lender accepted!
Now that the offer has accepted by the lender, the sale proceeds like a traditional real estate transaction. The proceeds from the sale of the home will be used to pay off the mortgage. Any remaining debt will be forgiven by the lender, and the homeowner will be released from any further mortgage obligations.
Unfortunately, in my client's father's case, he purchased the home right before rates decreased causing the massive growth in equity. Once rates increased, prices dropped resulting in a loss of equity gains that accumulated since the purchase of the property. This loss of equity may have been difficult for the estate to navigate, but the short sale allowed for the property to be sold without the need for foreclosure.
It is important for homeowners to stay up to date on the value of their property and to consider their options if they are experiencing a decline in equity.
Yes, I can help you with that too.

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