The Top 25 Short Sale Questions
It can be your primary residence, a second home or an investment property. In short, every type of real estate can qualify for a short sale.
In general, a short sale takes 4 to 6 months to complete.
It is an exhaustive process that requires several steps — all of which require time to complete and have to be performed in sequence. These include:
At the very minimum, you will need to provide the following to support your request for a short sale:
A Short Sale is contingent upon the seller’s lender agreeing to accept less than the amount owed, the addendum clarifies that contingency and also sets forth the time period that the buyer is willing to wait for approval.
A hardship letter explains why a homeowner is defaulting on their mortgage and needs to sell their home for less than what’s owed on the mortgage
Form 1040 (officially, the “U.S. Individual Income Tax Return”) is one of three IRS tax forms (see variants section for explanations of each) used for personal (individual) federal income tax returns filed with the Internal Revenue Service (IRS) by United States residents for tax purposes.
Yes, you can stay in your home until it closes. If you are facing foreclosure and actively pursuing a Short Sale, your bank will usually postpone foreclosure allow you to stay in your home a little longer.
No. Even if someone makes an offer on the house immediately, it can still take three to four months for the short sale to be approved at the bank.
Nothing. In most cases you will pay literally no sales costs if your lender approves a Short Sale. All commissions, title and escrow fees, and even most repair expenses are paid by the lender as part of the Short Sale approval. Your contract should include language such as: “Seller’s agreement to sell is subject to approval by existing lender of a Short Sale at no cost to Seller. Seller shall not be required to deposit funds to close escrow.”
These fees are absorbed in the transaction and do not come directly out of your pocket.
Because most of lenders require to have a house on a market, a short sale should be handled only by a real estate broker who has substantial experience with the short sale process , and a strong track-record of success in negotiating short sales for their clients. You wouldn’t have your family doctor perform heart surgery. And, you shouldn’t expect any real estate broker to be qualified to handle this highly complex real estate transaction for you
Yes. In fact, lenders are more motivated to do a Short Sale on a property that needs work than on a property that doesn’t. The lender knows the risk of loss goes up when they foreclose on a property that needs lots of work.
The homeowner is not in a financial position to make repairs so the property will be sold with the understanding that any necessary repairs will be the responsibility of the buyer.
The lender may reject an offer with the expectation that the buyer may return with a higher purchase price
If you qualify, you may be eligible to receive up to $3,000 at closing for moving expenses. Plus, this program delivers TOTAL PEACE OF MIND because you are CLEARED OF ALL REMAINING DEBT from your mortgage. You’ll have money to move on, and you can rebuild your financial life faster!
A Short Sale will not impact on the values of neighboring properties. It may result in a price that is 4 percent lower than if the property was the subject of a standard home sale.
A Short Sale package must be submitted to each lien holder and clear title must be obtained.
If a short sale or foreclosure auction fails to cover a sufficient amount of the outstanding loan balance, the lender may file for a deficiency judgment against you. A deficiency judgment is a court order that makes you liable for unpaid debt. In negotiating a short sale, THE PROPERTY SOLUTION TEAM will make every effort to remove any potential future claims as part of your agreement with the lender
In 2007, The Mortgage Forgiveness Debt Relief Act and Debt Cancellation legislation was passed. This allows homeowners to short sell their homes up to 2 million dollars with no tax consequences. Be sure to consult your tax professional for more information. You can also visit the IRS website at www.irs.gov.
If the terms of the Short Sale are not in your interest, you are not required to sell the property or complete the Short Sale. If you choose not to complete the Short Sale, the bank will continue to pursue you for the outstanding loan balance.
Yes, they will. That may mean calling or sending you letters looking for payment even if you are currently pursuing a Short Sale. But, most banks will not foreclose on your home if you are actively working on a Short Sale.
Yes, we are currently working with all banks. We have experience in working with over 50 different banks/lenders across the Nation.