Short Sale Questions and Answers

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Short Sale Questions and Answers

Short Sale Questions and Answers

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What it the difference between having a foreclosure on my credit record verses a short sale?
Potential borrowers with a foreclosure on their credit record must wait 5 years to be considered for new funding, and are subject to additional credit and down payment requirements for 5 to 7 years. Deed-in-lieu-of-foreclosures warrant a 4 year wait with additional requirements for 4 to 7 years. Finally, the silver lining...Short Sales require only a two year wait with no additional requirements

What do I need to know about capital gains tax?
A seller can be liable for capital gains from the amount of loss the lien holders have taken if the seller isn’t exempt from the capital gains exclusion. Be sure to always seek legal tax advice when needed.

Can a seller profit from a short sale?
A seller cannot profit from a short sale at any time.

What is a Short Sale?
A short sale occurs when the proceeds of a real estate sale fall short of the balance owed on the property.

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. This negotiation is all done through communication with a bank's Loss Mitigation department.

The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale.

Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market climate and the individual borrower's financial situation.

If you have missed more than one mortgage payment and need mortgage payment relief, contact us right away. Click on the “HELP button” at any time.

Can a short sale help me?
A short sale can help many owners who have missed one or more payments and possibly avoid a foreclosure. Not all homeowners qualify for a short sale.

Why do banks allow short sales?
In most cases it is in the best interest of the bank to allow a short sale. Banks many times can save thousands of dollars by allowing a short sale instead of letting it go into foreclosure.

When should I find out if I qualify?
The biggest mistake one can make is just waiting. If you have missed one or more house payments and need to sell your home, don’t hesitate to contact us at no obligation.

What paper work do I need to submit for a short sale to be negotiated?
Many lenders require the same basic information (pay stubs, tax returns and bank statements). We can provide a basic punch list to anyone who would like to have one at no obligation. Your lien holders may need additional information to make a decision.

Do I need a realtor?
In most cases it is best to have a real estate agent already trying to sell your home. If you do not know of a good realtor we can help through the RE/MAX network nationwide.

How long does a short sale take?
A short sale can take anywhere from two weeks to five months. Every case is different and it is best to get advice from a professional to find out what kind of timeframe you might be looking at.