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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 through the process known as a short sale. Why will my lender short sale or discount a mortgage or deed of trust? Answer: Lenders realize that once they take a house from the homeowner for non-payments, 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 or marginal home. Taking a hit early means your lender can put their money to use faster and start earning money again, so short sales are the best option to stop foreclosure. 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 and short sale your house to get a bad loan off their books. Plus you have to be over financed meaning after you pay all of your bills you can’t have any money left over for gas, food and other things that will keep you 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 or short payoff, will I be responsible for the difference? Answer: Sometimes a lender will try to come after a homeowner for the short sale 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 your lender is willing to waive their rights to come after you for the short balance. Most of time this is not a problem and they put that wording in their payoff letter they issue your after they agreed to a short sale price. 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 the debt that is issued by their lenders for single persons and $500,000 for married couples. That means that if your lender accepts a discounted payoff that leaves a balance of $249,999, you will be in the clear and my accountant can apply the necessary deductions to make sure you don’t have to come out of your pockets if you are single. I received a letter from the banks attorney saying a sale date is set they are going 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 early and inform them that you want to work on a short sale so they can send you the paperwork needed to start the process they will usually postpone a foreclosure sale if they receive a complete short sale package in due time. If you decide this is an option for you, we can arrange the paperwork and start the process so we can buy your house fast to stop your foreclosure. 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 can really hurt your credit. Once the Notice of Default has been issued and a foreclosure sale 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 if you go through with a short sale. 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 from a short sale. This makes sense, since they are the ones taking a loss. Any proceeds that are available 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 money 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. How long does it take to short sale my house? Answer: A short sale on average takes between 2-6 months depending on your lender. Smaller lenders can handle a short sale in a few weeks while the larger lenders need at least 3 months to process the paperwork. Can I buy my house back after the short sale? Answer: Lenders will frown if they agree to a short payoff and the original seller buys the house back. It would look like a refinance if rather than a sale if you purchase the house back and lenders will come after both parties that participated in the short sale if they find out you got your house back. 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 and your information will be kept confidential and won't be shared with anyone! WE DO NOT SPAM!!
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