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Short Sale
your home to help avoid foreclosure and sell your house Faster, and
Easier! What is a Short Sale? Answer: A short sale is something lenders or your mortgage holder will use to discount your home to help liquidate the mortgage to help avoid foreclosure. With the rise in foreclosures home values are sinking fast and lenders will discount your home loan to avoid the cost of going through foreclosure. Why will a lender discount a mortgage or deed of trust? Answer: Lenders realize that once they take a house from the homeowner for nonpayments, future buyers for that home will want a bargain deal. Everyone knows that a foreclosure property should be sold for less than other houses that are owned by private sellers, so to avoid holding onto a property for 6-8 months a lender will usually like to deal with a homeowner and their buyer to save at least $20,000. Taking a hit early means they can put their money to use faster and start earning money again. How do I know if my house qualifies for a short sale? Answer: Usually if you are at least 30 days behind on your mortgage payments, your lender is willing to talk about taking a discount to get a bad loan off their books. Plus you have to be over financed meaning after you pay all of your bills you don't have any money left over for gas, food and other things that will keep your from making your payments. That is just the basic qualifications. You should contact us immediately to see if you qualify for a short sale at 888-219-8619. If my lender accepts less than I owe on my home, will I be responsible for the difference? Answer: Sometimes a lender will try to come after a homeowner for the balance that is left over after they accept the discounted payoff. If they do, this is known as a deficiency judgment. As a buyer we will only purchase your home if the lender is willing to waive their rights to come after you for the balance. Most of time this is no problem and they put this wording in their payoff letter. If they waive their rights to a judgment, they will issue something similar to a 1099, which will become taxable. Our accountants have informed us that if a homeowner doesn't have the means or money to make the payments on their house which resulted in a short sale, they can arrange for the difference to be written off. If you decide to do a short sale, we can recommend our accountant that will take care of the capital gains from the sale. My accountant also said that homeowners are able to write off $250,000 of debt that is issued by lenders for single persons and $500,000 for married couples. That means that if your lender accepts a discount that leaves a balance of $249,999, you will be in the clear and my accountant can apply the necessary deductions. I received a letter from the banks attorney saying a sale date is set to auction my home, is it too late? Answer: As long as you have at least 2 weeks before the auction date, lenders are willing to work with homeowners and postpone the sale in order to avoid paying high cost to take your home. Although it is best to start communications with your lender and inform them that you want to work on a short sale so they can send you the paperwork needed to start the process. If you decide this is an option for you we can arrange the paperwork and start the process so we can buy your house. Will a short sale affect my credit? Answer: Yes, your credit report may show that your mortgage has been "paid off, less than full". This will let future creditors know that you didn't keep your obligation to pay off your, but it shows that you made a responsible attempt to get the lender majority of their money and that you had integrity. One thing you must realize the sooner you start the short sale process and sell your home the better. The longer you wait the more delinquent marks you will have on your credit report. So if you wait until 2 weeks before the auction of your house, and its takes another 4 months to work out the short sale, your credit will still be taking a hit showing 30, 60, 90, and 120+. Those types of marks are really what hurts your credit. Once the Notice of Default has been issued and a foreclosure date has been set then most lenders require you to wait 3 years before you can buy another home. This can be avoided if you save up a 5-10% down payment and find a homeowner to offer you owner financing, otherwise it will take 3 years to buy again. How much can I get if I short sale my home? Answer: Lenders don't want you to receive any money as a result of them taking a discount. This makes sense, since they are the ones taking a loss. Any proceeds they have you sign a waiver saying that you won't get any money at the closing. Now some lenders will agree to pay you $1,000 for moving expenses and to put down on a new place to live, but most will not allow you to receive any money. The only lender that insist on you getting $1,000 if FHA, others might not. My lender sent a letter through their attorney, do I have to leave my house now, and is that a foreclosure? Answer: No, the letter from your lenders attorney is to put you on alert that you need to make up your payments and that a sales date has been set. Only have the sales date are you forced to move from your house. Foreclosure is when the auction takes place. In the letter from your lenders attorney you should have two dates, one is the date you ordered to go to court to plead your case. The second date is the actual foreclosure. Some states have a redemption period after the foreclosure auction date of 1 year and others have redemption periods as short as 10 days. Check your state laws to see how long you have after the sale to vacate your house. If you have any more question about short sales you can go to our Ask the Expert page, and submit any questions you have. To get started on your short sale, fill in the form below and someone will contact you very shortly. We respect your privacy, your information will be kept confidential and won't be shared with anyone! WE DO NOT SPAM!!
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Sale your Home fast! |
