Stop Foreclosure
Q & A about Short Sales
Better known as "Pre foreclosure"
What is a short sale?
A “short sale” is simply when the mortgage holder agrees to take less than what is owed on the loan for a property. For example: You owe $250,000 but you can only get $200,000 for a sales price. The mortgage holder agrees to take the $200,000 (minus taxes, commission and any other expenses) instead of going through the expense and hassle of a foreclosure.
How do I qualify for a short sale?
Qualifying for a short sale is based on your lenders requirements. Your lender should be called immediately to inquire about their particular process if you are considering this option. Here are some of the things they will most likely ask for:
1)Are you behind or about to fall behind in your payment.
2)Can you prove financial hardship.
3)A purchase and sales agreement with a qualified buyer.
4) A net sheet.-(Your realtor can provide this for you)
Why would my lender do a short sale?
There are several reasons lenders would agree to this arrangement:
1)The average savings to a lender that does a short sale as compared to foreclosing on a property is $14,000.
2)They can get their money out (at least) 6 months faster than a foreclosure. Allowing them to put that money into an asset that will generate money.
3) They know that in a declining market, it is better to get what they can now, than to gamble on what they might get in 6 months.
4) They just don’t want an inventory of foreclosed properties piling up, costing them thousands and thousands of dollars.
Why would I want to do a short sale?
1) Your credit score on average will only be affected 60-80 points. This depends on other issues and credit history of course.
2) You can rebound much quicker with a short sale. If you have a foreclosure or file bankruptcy it will take 2 years before you are able to purchase another home (and it stays with you for years). With a short sale, you could buy immediately or have you credit back on track in 6-8 months!
3) The government has put a “debt relief” act in place that minimizes and in most cases eliminates a deficiency judgment on any property sold before December 2010! This means you will not owe the difference as once thought
Why would I need a Realtor to do a short sale?
Technically you don’t “need” a Realtor to do a short sale. However, the lenders will take you a lot more seriously when you tell them you have hired a professional to bring you that qualified buyer. Plus, a short sale takes time, patience, negotiation skills and the ability to make lots and lots of calls during the day! If you have not dealt with this kind of transaction, you could do more harm than good not turning it over to someone who has. And remember, the commission is paid out of the proceeds of the house so the lender ultimately pays the commission. The lender understands the urgent need to have a Realtor involved, and so is willing to negotiate the commission up front.
Why hire the CAMIBAKER.COM team to handle my short sale?
We have done it before. We are familiar with the process. We are willing to help, even though some don’t want to bother. It takes more attention and time to get a short sale done. We don’t claim that it is an easier way to get a house sold! Yet it is possible. If you HAVE to sell, don’t have equity, are behind on payments (or soon will be) and think you are stuck with no way out-there is hope.
We have partnered with professional short sale negotiators!
Short sales have become absolutely necessary for so many people. Because we have decided to help as many as we can, and because we know how important it is to make sure they go through…we have partnered with The Loan Workout Group. They are a local, full time short sale negotiating team that knows all the in’s and out’s to get this done as quickly and efficiently as possible. There are agents that will try to do it on their own, however their closing ratio will be much less without this professional team.
In Summary:
Short sales are much more beneficial than foreclosure or bankruptcy. Any back taxes, commissions and/or incidental expenses come out of the proceeds (the banks pocket). And you will be able to recover emotionally and financially more smoothly and sooner!
Call us for a FREE consultation!
For information about short sales and the government's view on releasing sellers from the tax liability: http://foreclosurepulse.com/archive/2008/01/03/4517.aspx
Another great link: http://www.realtor.org/subprime_lending.nsf/Pages/mort_cancellation
Another great link: http://www.ecommissionblog.com/2008/03/13/short-sale-mistakes/
Disclaimer: We do not claim to give legal or tax advice. Every situation is unique, therefore we suggest that you consult an attorney and/or tax accountant for that advice
