Q. What is a Short Sale?
A. A Short Sale is the sale of a home when sales proceeds are not sufficient to pay off the existing loan(s) but the lender(s) accepts a discounted payoff to fully satisfy the loan.

At the same time, the existing lender pays for all sales fees. This includes sales costs, commissions, escrow, title and any repair costs. The loan shows as “paid” with a zero balance on your credit and you avoid foreclosure.

Q. Why would a lender accept a Short Sale over foreclosure?
A. With an uncertain housing market, it is often in the financial interests of a lender to accept a negotiated settlement rather than incur the costs of a prolonged foreclosure process. And if a lender does repossess a property, they could continue to incur costs for months in order to maintain the property while they try and sell it. A short sale is a practical and cost saving alternative for all parties involved.

Q. Is a Short Sale right for me?
A. If you add up your total monthly expenses, including your mortgage, property tax payments, insurance, car payments, utilities and food and compare that to your take-home income, how much longer can you afford to keep up with your payments? If you have an adjustable rate, and the payment is going up, how long can you afford that? Is it worth prolonging your current financial situation?—especially if home values in your area continue to decline?

If you are faced with economic hardship, a Short Sale can be a financial life-saver. You may need to ask yourself, is it worth it to continue to fall deeper into debt, falling further and further behind with little hope of catching up?

A lender would usually rather negotiate a settlement today with a Short Sale than be forced to incur the expense of a foreclosure later. Consider this: the lender wants to limit their losses in the future just as badly as you do.

Q. How much would it cost me to sell my home in a Short Sale?
A. Nothing! All fees and commissions are assumed by your lender—NOT YOU.

Your contract will specifically read: “Seller’s agreement to sell is subject to approval by existing lender of a Short Sale at no cost to Seller. Seller shall not be required to deposit funds to close escrow.”

Q. Do lenders approve all Short Sales?
A. No. Approval by a lender is not automatic. This is why it is critically important that you work with someone that has extensive experience in Short Sales—someone that knows how to effectively negotiate on your behalf. If not handled properly, a lender could reject your Short Sale offer—risking foreclosure. Our Short Sale agents have years of experience with a proven success record, and are, without question, the best in the industry.

Q. If I have two loans, can I still do a Short Sale?
A. Yes. Your agent will work with both lenders to negotiate a Short Sale transaction. Even if the value of your home is less than the value of the first loan, our experienced staff can normally get both lenders to cooperate.

Q. What about my credit? Won’t a Short Sale ruin my credit?
A. A short sale usually does not reflect poorly on a credit report. And it cannot begin to compare to the damage your credit will incur if you are ultimately forced into foreclosure. With a foreclosure, you can expect to be unable to obtain a mortgage for at least 7 years. With a short sale, you can expect to resume normal borrowing (for mortgages, car loans and credit cards) within a very short period of time. Remember, with a Short Sale, you walk away with your mortgage debt zeroed out. With a foreclosure, the collection stays on your credit indefinitely!

Q. My property needs a lot of repair work. Can I still do a Short Sale?
A. Yes. A lender is often less likely to want to repossess (foreclose on) a home that needs work—it would make it harder for them to sell it later. Lenders are not in the “home repair” business. They do not want the responsibility. A home in rough shape may serve as an incentive for a lender to do a Short Sale.

Q. Can I simply deed my property to someone else and avoid foreclosure that way?
A. No. Be wary! If you fall behind on your mortgage payments you will quickly find yourself drowning in mail and phone calls from different people promising to “save” you. But deeding your property to someone else without first paying off the loan(s) is almost always a bad idea.  Even if you deed the property to someone else you are still responsible for the loan payments. If the loan payments are not made, it is your credit that is affected (regardless of who holds the deed). In other words, you lose control of the property and can still be foreclosed on. What ever you decide, do NOT deed your property to someone without first paying off the loan unless you have consulted with your OWN personal attorney.

Q. How can I get started on a Short Sale?
A. Very easily. To be pre-qualified, just give us a call today and we will review your situation and options. There is no charge and no obligation.