The term ’short sale’ has definitely gained popularity with the Alexandria VA real estate market over the past year.  While a short sale may not be suited for every homeowner, here are some basics to let you know how we help those who may be a candidate for a short sale.

The factors necessary in order to move forward with the short sale process:

• The homeowner may be behind on payments.  You don’t have to be behind on mortgage payments to qualify for a short sale.  Every bank, and every situation is different.
• There is little or no equity in the house, or homeowner owes considerably more than what the house is worth.
• The homeowner can prove a legitimate hardship.

Once the homeowner is aware of all options with the current mortgage company and if the owner chooses to proceed with a short sale, then we prepare the ‘Short Sale Package’ and submit it to the lender.

The short sale process for FHA loans if different than the process for VA and conventional loans.  With FHA loans, the homeowner must have written acceptance into the HUD short sale program prior to listing the home.  With conventional mortgages, the seller can proceed to market the home in the MLS and receive offers.  Based on the total amount owed on the home (which could include late payments, taxes, HOA/condo fees, mechanics liens), and a market analysis, we help determine the asking price for the home. 

The mortgage company may not explicitly offer a bottom line figure for what will be acceptable, so the market analysis proves to demonstrate what buyers are currently paying for similar homes.  This information is also included in the prepared short sale package to help strengthen the owner’s case for the approval.

The average time for a home to successfully close with a short sale is 60-90 days.  The benefits to the homeowner include the relief of no longer carrying a mortgage that is not affordable, and still being able to purchase a home.

As with a seller-owned resale home, the home is aggressively marketed both online and in print publications to secure a buyer.  As with all transactions, all financial information is kept in confidence, so you will never see our listings blatantly advertised as short sales.

If you’re selling your Alexandria VA home and your listing agent is not welcoming FHA and VA buyers, then your home may be on the market a lot longer, and it could eventually sell for less money.

The VA Loan is made available to veterans and active duty service members for the purchase or refinance of a primary residence or the refinance of another property on which a VA loan already exists.  Some additional basics include:

• Standard Maximum Loan is $417,000
• Standard Maximum Loan-To-Value is 100%, meaning that you can finance 100% of the purchase price, there is no down payment required
• Debt-to-Income Maximum is 41%
• Jumbo Maximum Loan is $1,000,000
• Jumbo Maximum Loan-To-Value is 85.425%

The FHA loan is made available to the general public and is available to any qualified individual for the purchase or refinance of another property on which an FHA loan already exists.  The primary benefit of the FHA loan is a lower down payment requirement and less stringent underwriting standards as compared to most conventional loan programs.  Some additional basics include:

• Standard Maximum Base Loan up to $362,790
• Temporary Jumbo Maximum Loan is $729,750
• Maximum Loan-To-Value is 97.75%
• Up front Mortgage Insurance Premium is 1.5% of base loan amount, which can be financed into the loan
• Annual Mortgage Insurance Premium is 50 basis points of base loan amount
• Debt-to-Income Maximum is 43%

But what does all of this mean to you if you’re selling?  It means that when the market was hot, it was common for buyers with conventional loans to beat out other buyers with VA and FHA loans due to the more strict financing rules.  Listing agents should make it known and openly advertise: "FHA and VA buyers welcome!"  That way you’ve made it clear as a seller that you’re open to entertaining all offers, not just offers where the buyer is receiving conventional financing.  Don’t let buyers guess and assume.  By opening yourself up to flexible financing, you open your doors to more buyers and increase the chances of getting your home sold quicker and for more money.

Buyers: Find out if you’re eligible for the VA loan.

Sellers: FREE Book on ‘How To Sell Your Home For Top Dollar Fast’