What is a short sale?
A short sale is a legal lender approved solution designed to assist those home owners who are financially strapped to get out from under their mortgage debt. In short sales mortgage holder agrees to take less than what home owner owes on the property.
An example of a short sale would be if a home owner owes $400,000 on their current mortgage and their home is only worth $375,000. The lender in this example would agree to take a short fall of $25,000 at closing. The mortgage holder may completely wipe out the debt and the home owner does not have to repay the 25k.
The home owner benefits in this situation because they get out of a sticky financial mess without going to foreclosure which can seriously damage your credit.
You may be thinking why would a mortgage holder want to allow a short sale? There are a number of reasons, most notably the cost involved for the lender going through a foreclosure proceeding. This avenue can save the lender money that they would otherwise lose.
All lenders are considering the short sale route, even if they have been unresponsive or unreasonable about a refi or loan modification.
If you are considering the short sale process please feel free to contact me with any questions. I specialize in this unique type of sale and have expert knowledge of all short sale procedures!
Unfortunately there are many “investors” in the market place who attempt to take advantage of homeowners who are experiencing financial hardship. I want to help you get the answers you need to avoid the scams and get the help that helps you and your family. Here are are a few commonly asked questions regarding a short sale.
1. How long does a short sale take?
a. A short sale can take time as the approval of the banks is required. You still have to help yourself and prevent your home from foreclosing. Call me at 770-310-7309 and I will contact you within 24 hours to see if your home qualifies.
2. Are there any upfront cost to completing a short sale?
a. I first must determine if it is possible for your home to qualify for a short sale. Once it is determined that I can help you all fees are paid by your lender.
3. Is a “quick sale” and a “short sale” the same thing?
a. Yes, a quick sale and a short sale are the same thing
4. Will I be able to avoid foreclosure?
a. A short sale is done to prevent foreclosure. Every situation is unique so we must evaluate your chances at a consultation. Should you decided to pursue a short sale I will work diligently with your to avoid foreclosure.
5. What if my home is currently listed for sale?
a. You need to be working with an experienced Short Sale Specialist.
6. Does it look better on my credit if I do a short sale?
a. A short sale is reported differently to the credit bureaus. Avoiding foreclosure on your credit is a big reason to do a short sale.
7. How quickly can someone buy a home?
a. It depends on the condition of your home and if there is equity in your property, each situation has its own criteria.
8. Will the lender issue a loan to me?
a. Every lender is different but it is likely they will issue a 1099 to you for the loss of the property. This will occur if the property goes to foreclosure as well.
9. Are there tax consequences to a short sale?
a. I am not a tax advisor and recommend that you speak with a CPA, tax advisor, or legal counsel. I have had many clients avoid any tax liability by speaking with their tax advisors.
10. Will the bank come after me when it is sold?
a. This is a common fear among home owners. Banks secure loans against the property, not against your personally. A bank may seek other means if there was fraud on the loan.
If you are considering a short sale and have questions, please contact me today at
770-310-7309 and I will be happy to help!
