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I specialize in Bank Work Outs, also known as “SHORT SALES”.
What is a short sale?
A short sale occurs when the net proceeds from the sale of a home is not enough to cover the sellers mortgage obligations. The seller is unable to cover the difference therefore; banks agree to the short sale of the property. Banks are willing to accept a loss in order to avoid foreclosure. All closing costs, property taxes, real estate commission and mortgage payoff are all factored into the short sale.
Home owners who bought at the top of the market or refinanced for equity, now need to sell because there situation has changed or your interests rates have increased. Many are unable to refinance due to this declining market. Home owners are faced with upside down mortgage or unable to keep up with mortgage payments.
This challenging economy and a large decline in the Real estate market have caused many homes to go to foreclosure. This is a very difficult and emotional situation.
Short Sale can be the alternative to selling your property and rebuilding your credit.
If you would like more information do not hesitate to contact me. I would love to help you.
What is a "short sale?" Questions and Answers!
A short sale is the process through which a mortgage company agrees to settle for less than what is owed to them. They do this as an alternative to the expensive and time consuming process of foreclosure. Each mortgage company has their own set of processes through which they decide whether or not to accept a short sale, and while there are many similarities, each has its own requirements for approval. As one of the most successful real estate companies in the state, we have a distinct advantage in negotiating with your mortgage company.
What are the advantages of a "short sale"?
• Sell Your Home Quickly and Easily
• For Top Market Value
• Pay Absolutely No Commissions & No Closing Costs
• Avoid Foreclosure & Bankruptcy
• Substantially decrease the negative impact on your credit
• Most likely Walk Away From Your Home With No Debt And No Tax Consequences
Does your house qualify for a "short sale?"
If your equity has disappeared, if your interest rate has readjusted higher, if you cannot afford the payments, or even if you just feel it no longer makes sense to own the home, then your house is eligible for a "short sale."
Will you owe the bank any money afterwards?
Most of our short sale clients pay absolutely nothing to sell their home, and walk away owing nothing to their lender(s).
Many of our clients walk away without the stain of a foreclosure or a bankruptcy on their credit, and instead of having to wait up to 7 years to buy another home, they are eligible to borrow money and buy again within the next 24-36 months.
How is your credit affected?
A short sale does create a negative impact on your credit. However, it has a lesser impact to your scoring compared to a bankruptcy or foreclosure. It is treated by your lender as a "settlement of a debt", as opposed to a foreclosure or a bankruptcy.
Keep in mind, most of the credit impact from a short sale occurs from the delinquencies in your payments. The more current you are on your mortgage the less your credit is impacted.
Do I need to be behind on my payments to do a short sale?
No. This is a common misconception. You do not need to be behind on your payments or have been late on a payment to do a short sale.
Why work with an experienced short sale specialist rather than my regular real estate agent that assisted with me with the purchase of my home?
Short sales are a different animal than a regular real estate transaction. The amount of time and resources that go into a short sale are far greater than a typical sale. Hours on hold, document preparation, and navigating through the maze of bank contacts are just some of the additional steps required to work a short sale.
You get one shot to do a successful short sale. If your agent is inexperienced at short sales, makes mistakes, gives up, slacks off, drops the ball, or simply does not know how to negotiate with the banks, you will wind up being foreclosed on by your lender. The majority of agents have never even closed “one” short sale in their entire career.
How much does it cost to hire a “short sale” comany?
Here's the good news! Generally speaking, your mortgage company will actually pay our fees (real estate brokerage fees) to assist you with your short sale. Nearly 95% of our clients have had no out of pocket expenses. The lender pays all closing costs, escrow fees, commissions etc. The lender may also pay any outstanding property taxes. Occasionally a lender will ask a borrower for some contribution toward closing. Ask us about this.
Who else is "short selling" their property?
It is expected that literally millions of short sales will take place over the next several years throughout the U.S. Today, there are literally thousands of short sale owners taking advantage of this unique opportunity and are currently marketing their properties as short sales throughout all of Massachusetts.
Why shouldn't you let your property go into foreclosure?
The primary advantage to doing a short sale vs. walking away and letting your home go to foreclosure is that in a short sale the debt is usually settled and you no longer owe the bank any money. If your home goes to foreclosure, you will still be liable for the deficiency.
In addition, if your home goes into foreclosure, your credit will be ruined. Your credit score will likely take a hit by as much as 300-400 points (or more) and you will be hounded day and night by your lender.
Even worse, you will have difficulty obtaining credit cards, auto loans or even renting a home or an apartment for the next 7 years.
How will I know that I am being released from the debt?
It will be stated clearly on the bank’s short sale approval. Your lender will state in very clearly that they are "releasing the lien", "accepting a short payoff to satisfy the lien", "reporting the sale as a settled debt to the reporting agencies", "issuing a full satisfaction of the mortgage", "not pursuing a deficiency judgment", or some other variation that states they are settling the debt for less than what they were owed. (See attached example)
What if I have a first and a second loan on my property with 2 different lenders (or the same lender)?
Many people that we do short sales for have a first and a second loan, often with 2 different lenders. For the short sale to reach a successful close of escrow, both lenders have to approve the short sale and agree to settle the debt.
It is important to note that both lenders have a vested interest in doing this. The lender with the first loan does not want to foreclose, and therefore is willing to give a little money to the second lender in order to get them to agree to the short sale.
The second lender will get nothing if the first forecloses, so with the attitude that something is better than nothing, they will agree to take a fraction of what they are owed in order to avoid getting absolutely nothing.
Does PMI (Private Mortgage Ins.) make it impossible to obtain an approval from the Bank?
This is a common question since so many people carry PMI on their mortgage. The answer is NO, it is simply another step in the process that we have to work through for the home to close. Honestly, it doesn’t make the transaction easier but by no stretch of the imagination does it preclude us from performing a Short Sale.
We know you may have more questions regarding your own situation but hopefully this helped answer many of the more common ones our clients usually have.
WHY IS IT TO MY
ADVANTAGE TO DO A SHORT SALE?
A foreclosure can impact your credit far more than a short
sale, especially in the long term. In fact, some banks don’t report a short
sale. In addition, in the event of a foreclosure in many states the lender will
seek a deficiency judgment in the amount you owe. They could even come after
other properties and assets of yours, including vehicles. Your credit could
recover from a short sale in less than 2years, where as a foreclosure or bankruptcy
can take 7-10 years. A short sale will likely lower your credit score by about
50-120 pints. The hardest hit to your credit comes from missing mortgage
payments rather than the actual short sale itself.
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