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SHORT SALES....... Questions & Answers
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I am a Certified Short Sale Specialist throughout Massachusetts working with homeowners to avoid deficiency on their home loans and prevent foreclosure.
WHAT IS A SHORT SALE?
A Short Sale occurs when a property is sold and the lender agrees to accept a discounted payoff. This means the lender will release the lien on the property for less money than is actually owed.
HOW LONG DOES IT TAKE TO NEGOTIATE AND CLOSE A SHORT SALE?
A Short Sale takes an average of 30 to 90 days to negotiate and close.
CAN YOU NEGOTIATE A SHORT SALE ON A PROPERTY WITH MORE THAN ONE LIEN?
Yes. The negotiation process is the same regardless of the number of liens.
CAN ANY REAL ESTATE AGENT ASSIST ME IN SELLING MY HOME IN A SHORT SALE SITUATION?
Possibly, but you have only one shot to succeed in a Short Sale transaction. Therefore, it is highly recommended you work with a company that specializes in this field and experienced in Short Sale negotiations so that they can properly represent you.
WHEN SHOULD I START A SHORT SALE?
It is best to begin a Short Sale when you realize you can no longer afford your mortgage. The reason for this is so your property can be marketed properly and you can receive the highest offer possible. We have negotiated Short Sales that have already gone into foreclosure sale. Contact Us to see if you have enough time.
HOW DOES A FORECLOSURE VERSUS A SHORT SALE AFFECT MY CREDIT?
Foreclosures show up on your credit report as "FORECLOSURE", and can stay on your record for seven years. This may make it difficult for you to obtain a new loan in the future. It must also be disclosed on job applications which can sometimes make or break a decision to employ you. A Short Sale is listed as "SETTLED DEBT", and is much less harmful to your credit. Please consult a credit company for more information.
In a Short Sale, it is possible the bank could report the difference in what you sell your property for and what was owed. This means the IRS could consider the difference as income, and you could be taxed on that income. The bank might also ask you to pay a portion of the difference back in the form of an unsecured note, which is similar to an I.O.U. However when we negotiate with the bank, we employ tactics to have the bank consider the debt settled and that no further monies are owed.
In a FORECLOSURE, your house is sold at an auction. This typically causes the difference of the total amount you owe and the foreclosure sale price to be much greater. This means you have a higher potential tax liability. Additionally, the bank may come after you for a Deficiency Judgment.
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A successful Short Sale will eliminate a deficiency judgment,
minimize your tax liability, and keep a foreclosure off your credit.
SHORT SALE: FNMA will approve a new mortgage loan 2 years after short sale.
FORECLOSURE: Eligible for new mortgage after 7 years.
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How Do I Get Started?
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Email or call:
to contact your Certified Short Sale Specialist
Deb Sanborn, CSP
tel: 774-373-8944
fax: 774-373-8946
cell: 781-953-6380
email: Deb@PlatinumProperties-MA.com
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Short Sales: continued.....
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By now the term "short sale" is part of the national verbiage. If you're wondering how this affects you as buyer or seller, here's more info!
SELLERS:
Regardless of the reason you need to sell your home, you find that the value of the home is less than your mortgage owed, you are in a short sale situation. This has become quite common in the current housing market and TCI Properties, Inc. can help you through this. First, listing your home will be the same process as an equity sale. An agent will visit your home and discuss the recent sales and listings in your area and find a fair offer price. While we certainly want to price the home aggressively, we also want to put together an offer that will be attractive to the bank so as to gain an approval. Once we have an offer that is acceptable....we will look at their financing, proof of down payment, credit scores, etc....then we package the offer and short sale packet to the bank. Our team of short sale experts will handle all this for you. We will work with the bank negotiator for you. All sales costs involved will be part of the settlement with your lender; you will have no out of pocket costs.
Despite what you may hear, you do not have to be down on your mortgage payments (missed mortgage payments); if there is a genuine hardship and you are/will have difficulty making your payments, a short sale CAN be done.
Do you qualify for a short sale? The 3-M's: MONEY/MARITAL/MEDICAL issues; at least one of these circumstances qualifies you for a hardship, and you can start and complete the process without ever having a 30-day late on your credit!
From the time we get the offer and until we close can take a couple of months. During this time, the lender will examine the information about you and the buyer. They may also order an independent appraisal to ensure that the buyer has offered a fair market price. Once this has been done, they will issue an approval.
A short sale can affect your credit! The amount that was settled can show as a charge off (or “settled”) on your credit report. Some professionals believe that lenders in the future will look more favorably on short sales because the sellers move proactively and did not just allow the foreclosure to go through. One advantage is time. The sooner you can get out from under a credit problem and start building good credit, the sooner you will recover. In this market, foreclosure can take up to a year or more to get through, a short sale can be done in a couple of months and then you will have a fresh start.
BUYERS:
Purchasing a short sale can be tricky! You need an expert to handle this for you. There are great prices to be had, but if not properly managed there is a great deal of frustration as well.
There is no universal method for handling short sales for the listing agent. Many will list the home artificially low in price to attract offers and then send all offers to the bank. They take no control over the process and wait for the bank to direct them. When we consider writing an offer on a short sale, we will identify this situation in advance and approach the offer accordingly. When an agent sends every offer to the bank, all we want to do is put our name out there so that the lender is aware of our offer. We don't want to try and outbid any offers they might have. When a lender has a file with 20+ offers in it, they are not as motivated to push that case through. They do not have the time to sort through offers and evaluate buyers based on offer amount, credit scores, mortgage terms, down payment, etc. These deals can take 3-4 months to hear anything. During this time, many of the offers will disappear, and in this market, prices might drop. We don't want to try and outbid an offer from a buyer who might not even be interested months from now. So, how do you purchase a short sale without the frustration? When we find a home you would like to purchase, your agent will approach the listing agent and offer to open escrow.
We will write our offer as if it were an equity sale. The seller and listing agent will examine our offer and perhaps counter. Once we have an agreement, we open escrow and put in a small deposit. Then we wait! The listings agent will submit only our offer to the lender for approval. We incur no costs, no inspection, no escrow costs, no appraisal costs to draw against the deposit until we have a firm commitment from the lender.
You, the buyer, are protected in several ways. First, understand that your deposit is protected. We can withdraw our offer at any time and for any reason. Second, you are going to be the only offer the bank sees. They will not have a huge file to sort through; they are much more likely to move our package through the system quickly.
Finally, we are not making our offer in the dark. We are not competing against offers that might not exist anymore. And we are not in danger of someone coming in at the last minute and outbidding us. We are the only offer being worked, so once we have our price agreed to, we can be comfortable that no matter how long it takes, it is our property. Certainly there are offers that are rejected, based on price or terms, but we will know the possible problems in advance and be prepared for them. Your agent will strategize with you on possible solutions. By utilizing these methods, you can purchase a great home at a much lower price in a short sale situation. We can help you with a short sale on your house, condo or other property anywhere in Massachusetts.
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***** Contact us for more information *****
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774-213-5004 or 781/953-6380
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Short Sale Defined.......
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A short sale is a sale of real estate in which the net proceeds from selling the property will fall short of the debts secured by liens against the property. In this case, if all lien holders agree to accept less than the amount owed on the debt, a sale of the property can be accomplished.
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