For homeowners the decision to do a short sale is usually not a simple decision. There are lots of questions. How do I know if I have to do a short sale or not? Do I qualify for a short sale? Are there other options. If i have to do a short sale, what does a short sale mean for my credit? Can I purchase a home again if I do a short sale? How does it work? Does it cost money to do a short sale & who pays the Realtor commissions? Will I be responsible for paying back the bank the remaining balance of my mortgage? What's in it for me? These are very common questions that we will discuss with you in detail.
My team and I have completed over 500 short sales and have helped countless others find alternate solutions that are right for them. We provide free consultations so you can get the right answers to all of your questions. Give us a call to discuss your unique situation. In the meantime below are answers to some of the frequently asked short sale questions.
What is a short sale? - A short sale occurs when the sale of your house results in the lender accepting less than the amount owed as a full payoff of your mortgage. A short sale is the result of the calculation of the value of your home vs. the balance of your mortgage(s).
What's in it for me? - Depending on your unique situation there are potential benefits to anyone considering a short sale. Avoiding foreclosure and taking control of your situation often empowers the homeowner and lifts the cloud of uncertainty homeowners face during these difficult times. Additionally, if a homeowner has more than one mortgage and/or other outstanding obligations we will work to negotiate a settlement with your creditors that can reduce or eliminate completely those obligations. If you're considering a short sale and want to know if you might qualify for one of these incentives give us a call.
Will I qualify for a short sale? - In most instances a homeowner must have a hardship in order to qualify for a short sale, but not always. The most common hardships involve loss/reduction of income, divorce or death of a borrower. Not every lender requires a hardship however and sometimes simply wanting/needing to sell your home qualifies.
What does it cost & who pays the Realtor Fees? - In most short sales the lender will cover all of the costs associated with the sale of the home (Realtor fees, Title, Escrow, Excise tax, & pro-rated property taxes) by deducting them from the net proceeds they receive from the sale. This means no out of pocket expenses for you.
Will I have to pay back the remaining balance of my loan? - The short answer to that is usually no - you don't have to pay the remaining balance of your loan. Most lenders will, as part of the short sale approval process, agree to release you of your obligation to pay the remaining balance of your mortgage(s). While there is no 100% guarantee this is our goal for everyone of our clients. If you do try a short sale and the lender does not agree to release you from the remaining balance of the mortgage you don't have to accept their terms.
Are there any tax consequences? - If your lender agrees to waive the remaining balance of your loan that will result in cancelled debt. That cancelled debt will affect the properties cost basis which could result in a taxable event. Insolvency or bankruptcy may alleviate some/all of the tax burden resulting from the forgiven debt. You should always confirm tax matters with a tax professional.
How long does a short sale take? - A short sale can take a little as a couple of weeks or as much as a couple of months depending on your lender. Many lenders have multiple layers of management, investors and insurers that have to give short sale approval. So it is important that you stay patient during the approval process. We can assess your situation and give you an estimate based on your unique circumstance before you get started with a short sale..
Does a short sale always work? - It does not. While the lenders usually prefer a short sale to a foreclosure they will always make a decision based on what they believe is in their best financial interest. Because we present the lenders with a smart alternative to foreclosure our short sale success rate exceeds 95%. A short conversation is usually enough for us to determine the likelihood of success.
Can I buy a home after a short sale? - You can buy a home after a short sale. As the financial crisis has founds its way squarely into the economic "rear view mirror" an increasing number of lenders are making home loans available to borrowers who have filed bankruptcy, faced foreclosure or completed a short sale. Because we work in this arena we stay up-to-date on all of the latest options. If you've experienced a hardship in the past but are now in a position to buy a home again we can help.
