In these challenging economic times, homeowners find that Knowledge is Power! Here are some of the questions that our clients most frequently ask when considering Short Sale as an alternative to foreclosure. Why would my lender agree to a short sale?
Lenders generally net a higher sales price from a short sale than they do from a foreclosure; lenders incur additional legal costs when they foreclose on a property, and that process can delay the sale of that property by several months; the maintenance cost and cost of selling reduce their net sales price even more. What is the difference between a short sale and a traditional sale?
The listing, marketing and negotiating is basically the same; if you owe more than the selling price, you are, in fact, completing a short sale. If your selling price plus closing costs and commissions total more than the amount you owe, you are completing a traditional sale. Can I negotiate a short sale myself?
Yes, you can. But that is not a good idea! A short sale is a very complex transaction. Your short sale can be denied for many reasons; hiring an experienced Real Estate Broker can make the difference between an approval or a denial. When facing possible foreclosure, time is money. Leave the process to professionals who can present your case and negotiate with your lender on your behalf. Return to Top When should I start working on a short sale?
You do not need to miss a mortgage payment in order to start the process. If you are looking for a strategic alternative to foreclosure, and have negative equity in your property, we can begin helping you now! What are my other options to foreclosure?
Your options include mortgage modification, deed-in-lieu of foreclosure, bankruptcy and short sale. See our page entitled "Foreclosure Options" for details about these options. Some homeowners just walk away from their homes. Is that a good idea?
It is not a good idea to walk away from your home, and from the contract to which you agreed when you purchased your home. In rare situations, foreclosure is the only option. A foreclosure has serious consequences to your credit, future employment and your ability to obtain new credit. Before choosing to walk away, seek legal counsel. Would a Bankruptcy be a better option?
Every homeowner's situation is different. But bankruptcy is seldom the best alternative. Bankruptcy has the worst affect on a family's credit and ability to purchase another home. You can declare Bankruptcy only once every 7 years, so you should consider this option seriously and seek legal counsel before making this decision. Return to Top How will a short sale affect my credit?
A short sale will usually show on your credit report as a partial settlement. It will lower your credit score, less than a foreclosure. Your credit score will recover more quickly than with a foreclosure, typically within 1-2 years. You will be able to purchase another home in 2 years, based on income and other qualifications. Will I be held liable for the deficiency of a short sale?
In some situations, lenders will waive the deficiency. Part of our negotiation is our request for the short sale approval to include a discharge of the debt. You will know prior to closing if your lender will be expecting any payment on the deficiency. We advise you to consult with a legal and tax professional for more detailed information about your individual situation. When will I be able to buy a house again?
According to current Fannie Mae guidelines, most homeowners can purchase another home 2 years after competing a short sale. Of course, your credit at that time must be excellent, and you will be qualified based on debt and income at that time. Will I owe taxes?
The Mortgage Forgiveness Debt Relief Act of 2007 allows for the exclusion of certain cancelled debt on a primary residence. This act does not apply to second homes or to investment properties. We advise you to consult with your accountant or CPA to determine your potential tax liability, as each individual's situation is different. If I have more than one mortgage on my property, can I still do a short sale?
Yes, but you will need an experienced Short Sale Broker to negotiate on your behalf. Negotiations must be successful with all lenders involved. We are experienced in these types of negotiations. Return to Top Can I receive any money from the closing if I complete a short sale?
Lenders do not allow the homeowner to benefit from the short sale. The approval of your short sale will be based on your not realizing any profit from the sale. In some situations, a homeowner can receive relocation assistance. We review those details with you when we have our initial consultation together. Can I continue to live in my house during the short sale process?
Yes, you can live in your home while we market the home to find a buyer, and continue to live there until the transaction is complete. You will be expected to vacate when the new buyer takes title to the home, as in a traditional real estate transaction. Must I continue to pay taxes and HOA dues if I am not making my mortgage payment?
Yes; you lender expects you to continue to pay your property taxes and any HOA monthly payments or assessments. Lenders will not approve a short sale if the homeowner has outstanding liens or past due balances for these payments. Can I begin a short sale after foreclosure has been completed?
No; once foreclosure has been completed, you no longer own the home. At that point, the lender owns the property, and the lender will sell the property as a REO property. Return to Top Is a short sale my best option?
Only you can decide if a Short Sale is right for you. With our FREE consultation, you will have the information necessary to make this decision. How long does a short sale transaction take?
Each situation is different, but the average time is 90-120 days, from your acceptance of an offer. Our goal is to obtain your lender's approval quickly and close the escrow within 30 days of the lender's written approval. Marketing time varies, depending on the price of your home and current market conditions. If you have other questions about the details of a short sale, please request a copy of our book "SHORT SALE...SELLER'S GUIDE." Call us today at 702-876-3553 or email terrilvp@cox.net for this free book! Visit www.shortsaleconsultantsofnevada.com for complimentary reports and special resources for Las Vegas homeowners considering a short sale!
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