What is a short sale?A short sale is a sale of real estate in which the proceeds from the sale (ie: the resale value of the property) fall short of the balance owed on a loan secured by the property sold. In a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor (Source: Wikipedia).
How do I know if I qualify for a short sale?One of the main considerations for a lender is called "hardship". Does the borrower have a hardship, a reason that alters his/her ability to pay the mortgage? A hardship may include loss of income, job relocation, military, medical, divorce or having an adjustable rate and not being able to afford the payments, just to name a few reasons. If the hardship is valid, chances are the lender will agree to consider the short sale package.
Does having more than one mortgage or lien on my home make the short sale process more difficult?The banks are in the money business and if it makes more financial sense for them to agree to a short sale v/s a foreclosure, they may prefer the short sale option. Most of the short sales that we have successfully negotiated carried multiple lien holders, up to four, including tax and federal liens. Even if the sales price is not enough to provide any money to the 2nd, 3rd or 4th lien holder, in most cases we can negotiate for the 1st lien holder to offer some money to the others so they agree to the short sale. In the case of a foreclosure, the subsequent lien holders may not receive any money.
Our in-house negotiator team allows us to keep in control of the discussion with the banks (we do not use third party negotiators) to make sure our clients' best interests are protected.
Do I have to pay for closing costs or delinquent property taxes to complete a short sale?We always ask the lenders to pay for the closing costs (including commissions), past due property taxes, escrow/title fees as well as other miscellaneous fees. Most of our short sale transactions have resulted in no out of pocket expenses for the seller.
If I do a short sale, am I liable for the difference/the balance?Possibly, however we have been able to have the lender agree to release their deficiency rights. Our clients' best interest is most important to us. We contractually cover our seller in the contract with indications that the sale is subject to the seller agreeing to the short sale approval terms. If the sellers are not satisfied with the lenders' terms, they retain the right to cancel the sale, at no cost, and explore other options.
There are tax implications regarding income tax and checking with your CPA or accountant is recommended. The Mortgage Debt Relief Act of 2007 may apply to your personal situation.
In this depressed market, I do not believe my home can sell. How should I price my home?Every seller must ultimately decide the listing price for him/herself. In most cases, we are able to receive offers within a few days or weeks on the market. We implement our full marketing program right away and this makes a huge difference. It is a mistake to price a home too low because the lenders will order a BPO (Broker Price Opinion) and/or Appraisals: if the contracts received are far below the current comps, the lender may refuse to agree to the short sale and this would dramatically delay the transaction. In certain cases, some homes are listed well below market value, at a price that the bank will not be agreeable to. The lenders may be much tougher in the short sale term negotiation if they believe they are misled with offers well below market value. Remember, it needs to make financial sense for the bank to agree with a short sale v/s a foreclosure. Moreover, it really damages neighborhood values to have properties "dumped", selling for less than they should.
If I am behind on my payments and have received legal notices from the lien holders, is it too late to complete a short sale?Once again, if the lender nets more money with a short sale as opposed to a foreclosure, they will most likely be willing to consider the request for a short sale. Lenders may be willing to delay the foreclosure/auction date on many occasions, even up to a few days prior to the final auction date, but time is of the essence: the sooner this is addressed, the more chances we have for success.
What makes you different from other agents offering to take care of my short sale?We care. The shifting market has affected many homeowners and we feel it is important to do our share to help. A foreclosure isn't always the seller's preferred option, and once you have explored your options, including foreclosure, with your accountant and attorney, if you find that a short-sale is best for you, we can help. We have been handling short sale transactions since 2007 and have had very high success rates, over 95%. Most agents would love to be able to claim such performance. We have our own in-house negotiation team which allows us to control the quality of the negotiation and ensure our clients' best interests are preserved. We have successfully negotiated short sales with up to 4 lien holders, many agents will not consider properties with more than one or two liens holders. Our sale contracts are written to protect our clients' best interests, giving them the right to cancel if the short sale approval terms are not acceptable to them.
We are also certified short sale professionals with RealtyU Group of real estate education & have negotiated short sales with over 20 different banks.