Don’t Let Your House Foreclose! Let us list your home and sell it as a short sale, rather than letting the bank foreclose! It’s probably not too late!
What is a Short Sale?
A short sale is when a bank or lender agrees to accept a discounted payoff on a loan because the home owner owes more on the property than the home is currently worth. To qualify, the seller must prove economic hardship.
Why would I rather Short Sale than Foreclose?
A foreclosure can impact your credit far worse than a short sale, especially in the long term. Part of the short sale approval, is the bank forgiving the difference between what you own and what your sale nets. On the other hand, in the event of a foreclosure, the lender may seek a deficiency judgment in the amount you owe, allowing them to come after other properties and assets that you own. Your credit could recover from a short sale in less than two years, whereas a foreclosure or bankruptcy could take 7-10 years. A short sale will likely lower your credit score by about 50-120 points. The hardest hit to your credit comes from the required missed mortgage payments rather than the actual short sale itself.
Can I get any money back from a short sale?
The new Home Affordable Foreclosure Alternatives (HAFA) initiative recently announced November 30th, 2009, allows qualified home owners can get $3,000 BACK from a short sale to use towards relocation expenses! Click Here for more information on this program.
What are the qualifications for a Short Sale?
The qualifications are two-fold. First, after expenses, you must not be able to sell your home for what you owe on it. Secondly, you must be in some type of financial hardship which causes you to have to sell and prevents you from bringing the difference between what you can sell the home for and the pay-off to the closing table in cash. This can include: decreased or low income, loss of employment or income, divorce or separation, relocation or job transfer, major illness and medical expenses, expensive home repairs without the resources to make them, increased bills or higher living expenses. A short sale is not for those who want to sell, it is for those who have to sell. You usually need to prove your inability to pay your mortgage each month.
What if I can sell my home for more than the loan pay off, but not as much as it would cost me with all of the fees?
You can still short sale your home. Many homeowners have their home priced above market, hoping to gross enough in the sale to cover their loan and all the closing costs and Realtor fees. When they realize that if they reduce the price to sell, they don’t have enough to cover the costs and they don’t have the cash to cover the costs themselves that’s the time to short sale the home. The lender will pay all of the fees (including Realtor fees) in an approved short sale.
If I short sale my home, can the lender or bank come back after me for the money?
We will work to get a full release for you at closing which will fully forgive any deficiency between the amount you owe, and the proceeds from the sale of the home. Of course, you should consult an accountant regarding the tax ramifications.
Who will pay the Realtor commission?
Your lender will pay the commission as part of the approved short sale. Once approved, you do not pay any fees.
How much work will this take?
A little bit. You will have to gather certain financial information and forms for your lender. We will handle the marketing and sale of your home, as well as the negotiations with the buyer and the bank.
What happens to the money that is forgiven from the lender?
Usually the shortfall on your mortgage will be written off as a loss by your lender. Because of this, your lenders may also send you a “1099″ for any amount forgiven. However, you are not required to pay taxes on this money if you short sale your primary residence prior to 2012, thanks to the Mortgage Debt Relief Act of 2007. You should consult your accountant for more information on this.
If I am going through foreclosure, can I do a short sale?
Yes! The bank will be more than happy to work with you on a short sale. The bank would always rather short sale the home, than have it go through the incredibly expensive and lengthy process of a foreclosure.
Can I live in my house until the short sale is completed?
Yes. You do not have to move out until the closing. You will have plenty of notice as to that date. Further, short sales are not quick. You could end up in the home for quite a while.
Will the bank continue their collection and foreclosure actions?
Yes. These are two different departments and so the bank will continue to attempt to collect and to notify you of the pending foreclosure. They will call you and/or send you letters demanding payment, even if you are currently pursuing a short sale. Most banks, however, do not foreclose as long as there in an active short sale (i.e. an offer has been accepted and paperwork has been submitted to the bank).
Are there any dangers to be aware of when working a Short Sale?
Quite a few. But most experienced short sale agents will not charge you or the buyer a fee. We get paid our commission from the bank, so there is no need for extra charges. When many buyers see that there is a $5,000 extra charge to the “short sale coordinator or company” at closing, they tend to move onto another home. Remember, it should cost you or the buyer anything extra. And of course, time is of the essence. We need to balance getting the home sold and getting an offer to the bank before the home moves onto the foreclosure schedule. It takes an expert to ensure all of the marketing, pricing and paperwork all balanced to get this done in the time allocated before a true foreclosure.
Can my current Realtor work a short sale on my home?
If she is experienced in selling short sales. While many agents have negotiated a short sale on the buyer end, you must make sure that the have the knowledge and experience to execute a short sale from the sellers end. A short sale is not part of the Realtor “basic training.”, so make sure they have plenty of experience under their belts. Even most agents with CDPE (Certified Dist. Property Expert) or Short Sale designations may actually be inexperienced. Make sure you ask them how many homes they have listed as short sales and how many of those actually closed.
We know this is a stressful time for you. We make it our job to walk you through the entire process and make it easy for you.
Please contact us for more information and a free confidential consultation!
Our Short Sale Services:
- We will discuss your situation and explain all of your options with you in detail. A short sale is not always the best option in every case.
- We will walk you through the short sale paperwork that is required from your lender.
- We will coordinate an aggressive marketing plan to attract buyers to your home and get it sold.
- We will work directly with your lender to negotiate the short sale, and handle all of the documentation requirements with your bank.
- We will get your home sold and have the bank forgive your debt and the loan deficiency.
Please seek legal and financial advice from your own attorney and financial advisors.
Call us at 832.721.9979 or fill out the form below for a free, confidential, no obligation consultation to discuss how we may be able to serve you. Time is of the essence when it comes to these matters, so we will get back to you right away.