What is a Short Sale
Short Sale
A Short Sale could be an option for you that would avoid you from having to go through a foreclosure. A short sale is also a much better option than a foreclosure when trying to lessen the impact to your credit, maintain some peace of mind and there are no additional, out of the ordinary costs in selling your home this way as I earn my fee that your Lender authorizes to pay at closing. Plus, this can get you on the road to a quicker recovery. But you cannot delay.
What is a short sale?
Simply stated; a homeowner sells home for less than what is owed on the loan as agreed to by Lender.
Lender accepts that amount as payment and most often settles your account.
Homeowner escapes foreclosure and typically will not receive any funds.
The forgiven debt may be taxable income. The seller should discuss this matter with a tax accountant as there are situations where your income would not be taxed.
Advantages of Short sale over Foreclosure
Your credit score will be affected less adversely than with a foreclosure.
FHA guidelines has reported that a homeowner having sold their home as a Short Sale can be in a buying position in as little as two years, whereas foreclosure will be years longer.
In a letter dated as of December 16, 2009 FHA has revised the guidelines for short sales effective immediately:
“... borrowers are considered eligible for a new FHA-insured mortgage if: 1) they were current on their previous mortgage and other debts at the time of the short sale and 2) if the proceeds from the short sale serve as payment in full.
"We also stated that borrowers are not eligible for a new FHA mortgage if they pursued a short sale agreement to take advantage of declining market conditions, or to purchase another property at a reduced price. Additionally, borrowers who execute a short sale while in default on their mortgage are not eligible for a FHA-insured mortgage for three years from the date of the sale. Lenders, however, can make exceptions if the default was due to circumstances beyond the borrower's control, such as the death of the primary wage earner.”, as reported by Assistant Secretary for Housing/FHA Commissioner".
Myth Busters.
Check the facts.
Don't believe everything you hear. Didn't we all learn that when we were growing up and later realized it to be true through our trials and errors? So why then do we forget this when we're experiencing stressful situations?
* Only low income people qualify for a Short Sale - wrong
* You must be unemployed to qualify for a Short Sale - wrong
* You must be behind on your mortgage payments to qualify for a Short Sale - wrong again
* You must live in the property that you want to sell as a Short Sale - wrong
* As a Seller I can never receive any money at closing - wrong. HUD pre foreclosure guidelines offer incentives to Sellers to avoid foreclosure. A Seller can get up to $750.
* You must sell your home close to your mortgage balance - wrong again
* You must pay back the deficiency in a Short Sale - still wrong. This can be negotiated with Seller's Lender and many Lenders will not pursue.
* You will always have to pay taxes on the deficiency in a Short Sale - wrong again as this depends on the Sellers situation. As always recommended, check with your CPA who's knowledgeable in Short Sales as not all CPA's are up on this.
* Any Real Estate Agent is qualified to list your home as a Short Sale - so wrong . Many Real Estate Agents with years of experience are well versed in Traditional sales yet when it comes to Short Sales they are lacking in the knowledge and skills to successfully handle a Short Sale. Find an Agent who specializes in Short Sales and has closed Short Sales here in South Florida
* It's too late to sell your home as a Short Sale once you've been delivered a NOD (notice of default) - wrong
* You can't sell your home when you have other Liens on it - wrong
* Sellers must pay out of pocket for their closing costs - wrong
* You must remain current on your HOA fees - wrong many Lenders will authorize to pay
* Most Short Sales do not get approved to close - so so wrong . I have 100% approval.
