What is a Short Sale?

A short sale can be an excellent solution for homeowners who need to sell, and who owe more on their homes than they are worth. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders have become much more negotiable when it comes to these transactions. Recent changes in corporate policy and the Obama administration have also improved the chances of getting a short sale approved.

But to be technical, here's a more official definition:

• A homeowner is 'short' when the amount owed on his/her property is higher than current market value.
• A short sale occurs when a negotiation is entered into with the homeowner's mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then 'sold short' of the total value of the mortgage.

For homeowners to qualify for a short sale, they must fall into all of the following circumstances:

• Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
• Monthly Income Shortfall – In other words: "You have more month than money." A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
• Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

 Together, you can identify all possible options and, when possible, a CDPE can assist you in the quick execution of a short sale transaction.

 

OWE MORE THAN WHAT YOUR HOME IS WORTH?

A "short sale" refers to selling your home when you owe more than it is worth. If this is the situation you are currently in, don't despair. Routinely, we help people overcome obstacles even more challenging than the one you're facing.

Learn how we can help you. Contact us today so that we can discuss your situation, and explain exactly how we'll help you. When you choose us as your real estate representative, we can negotiate with your mortgage company on your behalf. In most cases, we can help you get out of the home you're in and move into one you can afford and build equity with.

Of course, the first step is to contact us, so that we can begin helping you past your challenges. To learn more about short selling your property call Johanne

What is a Short Sale?
Unlike a Foreclosure which is the process in place for delinquent properties.  A successful Short Sale is the method used by home owners to derail the Foreclosure process.

When the sale of property produces less proceeds than the total pay off for all loans, liens and other costs associated with the sale, the sale is "short".  Short to whom?  Short to the Bank(s) and any lien holders who have a monetary claim against the property.  

Benefits of a Short Sale:

* Avoid having a Foreclosure on your record
* Avoid being sued by your lender for losses after Foreclosure
* Sell your house for less than you owe
* Walk away without paying a dime!
* Walk away free and clear from your house without any debt attached to it
* Stay in your house longer
* Be back in the housing market in 24 months
* Sell your house and close your account with the bank for good
* No Commissions, the bank pays for it all
* Stop the stress you are under now
* Get immediate relief. Avoid public notification of your debt, default and loss of property
* Pass on the stress of dealing with the banks and debt collectors to us
* You Pay No Commissions to do a short sale.

Don't let the bank Foreclose
Let us Negotiate a Short Sale for you!
We will sell your house and do all the negotiating with the banks on your behalf.
We have negotiated hundreds of short sales and we can negotiate yours too! One of the many benefits: It won't cost you any Commissions!

If you owe more than your house is worth you are not alone.
Thousands of homeowners are facing foreclosure every day because they cannot keep apace with their mortgage payments and cannot sell their homes at a price that will pay back the loan and the costs associated with the sale.
If this is your situation, let us help you Avoid Foreclosure and the punishing impact it will have on your present and future credit rating. For primary residences, opting for a short sale solution gives you immediate debt relief from all mortgage related creditors.

Why should I do a Short Sale?
If you are unable to pay your mortgage now or foresee that you will be unable to pay the mortgage in the near future, a short sale may be the only pro-active option you can take to try to avoid foreclosure.

Doing nothing assures a foreclosure and this is the worst possible option.

Short Sale enables you to:

*Avoid Foreclosure 
* Avoid "Foreclosure" on your credit report
* Avoid Bankruptcy
* Let go of financial burden and stress of related to your mortgage delinquencies.
* Minimize financial liability, if any, because your house will sell higher price in short sale than in foreclosure.
* Even if the lender sells the property through foreclosure this may NOT remove your obligation to repay the remaining balance. The financial obligation may not be wiped away.

Why would the Bank accept a Short Sale?
Time is Money. Foreclosure action is expensive and lengthy. During the foreclosure process, the property is a non-producing possession that is declining in value every day. If the property becomes vacant and/or vandalized, it will cost the Bank even more.

Even after a home has been Foreclosed, the Bank must still hire an asset management company who will then hire a local Real Estate Broker to list and sell the property. The Bank will compare the cost of the Foreclosure vs the cost of a Short Sale. If there is little or no equity in the property, the Bank will have to conclude that it is better off accepting a short and immediate sale.

Also, because we have done hundreds of short sales and negotiate with banks all day long, every day, we understand what the banks are looking for and how to talk to and structure a short sale package. This gives us the best chance of getting an approval from the bank and getting you out of your current mortgage without a Foreclosure and an opportunity to start fresh.
The banks now generally recognize our CDPE Certified Distressed Property Experts packaging and already expect that it is complete and ready for approval. This "halo effect" gives our files the edge over other files in queue to be reviewed and approved by the Bank.

What If My Home Is Already In The Foreclosure Process?
Even if you’ve stopped making payments or received a Notice of Default or Notice of Sale, the Foreclosure sale will usually be suspended during the short sale process.

How Will a Short Sale Affect My Credit?
Banks have the option of submitting the short sale to the credit bureau as “Paid in Full” or “Settled for Less Than Full Balance.” As far as your credit score is concerned, there is no evidence to support that a short sale will lower your credit score. Some have the idea that this is like a bankruptcy or a foreclosure. That is not true! In a short sale the lender is simply allowing you to pay less than you owe.

Do I Have To Put My House On The Market To Do a Short Sale?
Yes, the banks want to see that the house is for sale and we need an actual offer from a qualified buyer that we can package and present to the bank in order to negotiate the short sale with the banks.

Can I Get Some of The Money Back From The Sale Of The House?
The short sale law is very clear on this point. When a bank accepts less than the amount owed on the house the seller can receive no proceeds from the sale. It is illegal to receive any money back from a short sale. We negotiate everything with the bank to accept a short pay off on the outstanding balance and you will never pay a dime.

How long is the short sale process?
The Bank's short sale process is by no means short. Generally, it takes 3-4 months to close a transaction AFTER an offer and short sale package has submitted to the bank.
During this time we may even need to bring the house back on the market and accept offers from new buyers if the first buyer falls out. We may need to briefly open the house up to buyers two or even three times before we get a final approval from the bank.

What are the consequences of a short sale on my home?
Reconciliation of the debt with both the 1st and 2nd lien holders are explicit in their written terms of approval. Generally, the debt is cleared by the 1st lien holder when it accepts an offer. The 2nd lien holder may accept the pay-off from the offer as payment in full and/or may offer the home owner a promissory note for a portion of the outstanding loan for payment in full and/or still pursue the homeowner for the remainder. We are in the position to negotiate all possibilities to reconcile your mortgage loans.

The Bank(s) is obligated to report its debt relief loss to the IRS and issue you a 1099 i.e. income to you. Debt relief is considered "other income". The recently passed Debt Relief Bill will not cause taxation on residences that received mortgage debt relief from January 1, 2007 through December 31 2009.

You are advised to consult a tax professional to understand how the 1099 for primary residence affects the tax return for the year of the sale.

What are the consequences for investment property?

Investment properties in short sale do not qualify for the debt relief income tax waiver. The Bank(s) is obligated to report its debt relief loss to the IRS and issue you a 1099, i.e. income to you. Debt relief is considered "other income". You will have to reconcile your debt relief in your income tax for the year of the sale. In doing a short sale, your debt relief will be minimized because the property will probably sell at a higher price that it will in foreclosure.

You are advised to consult a tax professional to understand how the 1099 for investment residence affects the tax return for the year of the sale.

Do I have to stop paying my mortgage?
The Foreclosure process begins when someone stops making their payments and a short sale cannot take place until the Foreclosure process has begun. We cannot advise you to continue or terminate your obligation to the Bank. However, even if you are current in your payments, if the value of your property is less than the loans on it, the Bank will still have to deal with a short at sale. If you have stopped making your payments or have already decided too stop making them call us right away to stop the Foreclosure process.

What if I have a Notice of Default?
We can help you with a successful short sale if you already have an NOD. However, you must contact us IMMEDIATELY because time is very short and there is much work to do.

What if I already have a Notice of Sale?
We may be able postpone the Trustee Sale Date and complete a successful short sale if there is an offer on the property. However, if the Trustee Sale date is 5 days or less and there is no offer on the property, it is unlikely that there is anything we can do. Contact us IMMEDIATELY so we can give you the best information. Every day counts.

When should I contact and list my house For Sale?
If your mortgage is already overwhelming you or you are expecting it to re-set soon at a higher interest rate than you can afford or you have received an NOD, contact us NOW!! Act fast! A successful short sale depends on you giving us the time needed to complete each of the many steps of the short sale process.

What we need from you:

Most importantly, we need your help. We understand that the last thing you want to do is sell your house but if Foreclosure is the only other option then selling it is better. We are actually on your team and here to help you get out of the house easily and without financial recourse. We will need your assistance. 

We will need you to list your house with us For Sale and allow buyers access to the house for a short period of time so that we can accept offers on it. We typically list the house at a price that will be acceptable to the bank. This also gets the house off the market quickly and stops the buyers from coming through the house. After we have stopped accepting offers and have taken the house off the market our team will be negotiating with the bank to accept a short pay off. 

While the house is available For Sale and actively being marketed the buyers and their Realtors will need to be able to view the house and you will need to keep it clean and looking good so that we will get more offers and at higher prices. This is the best way to stall the Foreclosure process. The better the house looks, the faster it will be off the market.

In addition to your help in keeping the house clean and allowing buyers access to the property we will need a copy of your mortgage statements or coupons for each bank. We will also need your HOA information if you have a home owners association, a copy of your bank statements (savings and checking) for the last two months, a copy of your last two months paystubs or a profit and loss statement if you are self employed or evidence of unemployment or other sources of income, your last two years tax returns and any notices you have from any banks, HOA’s or other lien holders that we will be negotiating with.

How do I get the process started?

Call Johanne 941-485-4240