Short Sale Seller vs. Owner Seller - Can I sell my short sale to a relative?
With the increase of short sales and foreclosures on the market, there is always the increase in mortgage scams and fraud. While a typical seller can sell their property to anyone they choose, if the homeowner is forced into a short sale process, they are restricted as to who they can sell the property to.
If a homeowner is unable to make the mortgage payment a short sale may be the best option. This is better than a foreclosure and has a quicker recovery time. But, as with anything that requires some sacrifice, there is a price to be paid. Banks will only sell the property to qualified buyers and unfortunately this prohibits anyone that the current borrower/owner is associated with.
This is called an arms-length affidavit. It prevents the borrower/owner to sell the short sale to anyone they are associated with including relatives, business associates, friends, or anyone the owner has a specific interest in. This is due to the fact that there have been too many mortgage frauds to contend with.
For example: let’s say owners need to short sale their home and their parents want to purchase the property and in turn let the previous owners still live in the home and simply make rental payments to the parents. While this may seem honorable, it is prohibited. Banks would rather have the real estate off their books completely than keep the homeowner in the home. Although this doesn’t sound fair and may be confusing for some, banks have been jilted by too many mortgage scams and fraud reports. If anyone tells you that you can sell your short sale to a friend or relative, don’t believe them. It is a federal offense and charges may be filed against you.
The best hope for a short sale is to have your Portland short sale agent sell the home as quickly as possible to an unrelated party. As your short sale listing agent or buyer’s agent I make it my duty and goal to make sure that the entire process and transaction is handled appropriately and legally. Any extra compensation over commission or hidden agendas are simply not allowed.
Again, this is only in the case of a short sale. Typical sellers can sell to whomever they choose. Banks on the other hand, want to start fresh with the new buyer that is not associated to the seller in any way.
If you have more questions or concerns about selling your home under a short sale or purchasing a short sale home in Portland’s real estate market, simply contact me anytime. I would be happy to answer your questions, offer real estate advice, and help assist you in your goals.