What Types of Properties Qualify for a Short Sale?
It's important to think about the different types of properties that can qualify for a short sale. You might be surprised to learn that there are quite a number of individual qualifications that a property must possess before it can be considered for a short sale. Each and every one of the qualifications are based on the hardship created if the property were not to be sold.
The most common qualification a home has for a short sale is when the home is under water or "upside down". An underwater or upside down home is when the purchase loan on the property is at a higher balance than its actual market value. A situation of this type requires that the homeowner takes a loss or a hit (loses money) on the sale. Under these financial circumstances, the homeowner wouldn't be able to refinance the property and if the homeowner can't afford the mortgage payments, they would eventually face foreclosure.
Homeowners who are experiencing severe financial hardships of some kind or another are also eligible for short sales. Hardships on homeowners usually apply to people who've lost their jobs or other sources of income so that they are suddenly unable to make mortgage payments. Homeowners may also have been subjected to a prolonged illness or injury that has kept them from having enough finances to cover their monthly expenses.