Short Sale Information for home sellers
Is a Real Estate Short Sale right for you? These questions will help you decide:
1) Has your mortgage payment reset upward to an unaffordable level, yet you are unable to qualify for a refinance (or the government "Home Affordable Refinance" program)?
Or, did you lose your job (or suffer a reduction in income)... and now find you cannot make your mortgage payment and you are unable to qualify for a loan modification with your lender (or the government "Home Affordable Loan Modification" program)?
2) Does the mortgage balance exceed the current market value of your home?
3) Do you want to minimize the damage to your credit?
If you have answered "Yes" to the above questions, a Short Sale may be the service you need.
What is a Real Estate Short Sale?
A real estate short sale is when you owe more than your property's currently value but you need to sell. In a typical situation, your mortgage lender(s) would require you to come in with the difference in the amount owed. A real estate short sale is where we negotiate with you lender(s) to accept a pay-off that is less than you currently owe and you do not have to pay the difference.
What are the benefits of doing a Short Sale?
More Honorable Solution: In a Short Sale you decide to sell your home to another potential home buyer - just like your neighbors have over the years. It is a relatively pleasant and dignified resolution to a very tough situation. If instead your home goes through foreclosure, a Bank representative will come to the home to lock up the doors and windows and change the locks, and if you are still there, they contact the Marshall for eviction. The agent for the bank usually slaps 'Bank Foreclosure' sign on the property while the house sits empty waiting for a sale. This is very embarrassing for friends and neighbors to witness.
Relocation to a new home is easier: After your old home is sold, you will be looking for a home to rent after this issue is resolved. It is easier to find a home to rent if you conduct a Short Sale versus a Foreclosure. Most property managers obtain a credit report . A Short Sale shows you cooperated with your bank and did the most responsible thing possible given the circumstances. A Short Sale instead of a Foreclosure will very likely help you to rent a nicer home with a more reasonable rent payment.
Less Damage to your credit: A Foreclosure will stay on your credit report for 7 years, but a bank Short Sale will on your credit for a shorter period and it will indicate that you “worked out” your situation rather than “walked away”. Completing a short sale with an experienced Short Sale Realtor will move the short sale to a completion sooner and result in less damage to your credit. Much of the damage done to your credit is a result of month-after-month of "30-Day Late" notices on your credit. The quicker we complete your short sale, the less damage to your credit.
Higher FICO Score: A Foreclosure more negatively affects your FICO score which is the rating number mortgage lenders and landlords use to determine if they will loan money to you or rent you a place to live. If you want to borrow money in the next 5 to 7 years a Short Sale will improve your ability to borrow.
Do I need to hire a Short Sale Mitigation Company?
No! And, BEWARE of any Short Sale or Loan Modification Company who tries to charge you an up-front fee. When Coldwell Banker - Campbell Realtors is your broker for a short sale transaction, there is NO Up-Front fee and all of our fees are paid at close of escrow by proceeds made available by your bank lowering the mortgage balance. You pay nothing to us for our services... and, you pay nothing for any of the other closing costs!
Who can Qualify for a Real Estate Short Sale?
Typically, the mortgage lenders will only accept a real estate short sale if you are at least one month behind on your mortgage payments, have a ready and willing buyer and you are unable to debt service all of your existing liabilities. Also, if you financial situation has changed and you are currently making less money than before and you have no more savings, you may qualify for a real estate short sale. This is the reason why we need to above documents to paint a clear financial picture of your current situation. NOTE: We Do Not Recommend you stop making payments to qualify for a Short Sale.
Tax Implications of Real Estate Short Sales
You are advised to consult your CPA or tax expert, we cannot advise on those consequences. Except for certain conditions pursuant to the Mortgage Forgiveness Debt Relief Act of 2007, be aware the I.R.S. will consider debt forgiveness as income and will issue a form 1099s for debt relief for recourse loans.
What is Required for a Real Estate Short Sale?
In order for us to get a real estate short sale accepted for you, we first must list your home “For Sale”. The lender will require that the home be marketed with a Realtor to ensure that the property is effectively marketed.
As soon as possible after signing the listing, you will need to provide the following documents to our loss mitigation consultant so that we may package a real estate short sale request to your existing mortgage lender(s):
Last two years tax returns with W-2's and any tax schedules
Most recent two months of pay stubs
Most recent two months of bank statements for all your accounts, including retirement accounts, 401k.
Current mortgage payment coupons for existing mortgages
Copy of original mortgage note and deed of trust
With these documents we create a package as to why you require a real estate short sale and submit this to the appropriate department at your lender, once we have an accepted purchase offer for your home.
Time is of the essence!
If Foreclosure proceedings have started on your home, then you have only 3 months and 3 weeks before your home is sold at the public Foreclosure Auction on the courthouse steps.
We do not charge any up front fees, and we only get paid if we complete a successful short sale transaction for you.
Our Short Sale Negotiating Experts can often get the foreclosure delayed, but only if you call quickly and give us time to find a buyer for your home.
A short sale is preferable to a foreclosure on your record. Bloomberg Article: Short Sale or Foreclosure?
The Scot Campbell TEAM has a proven track record for completing Short Sales quickly and successfully
If you would like to confidentially discuss the possibility of a short sale with a team of experts please contact us today. We offer a FREE consultation which will answer your questions, and provide you with the information you need to make a good decision
We understand you are a good person trying to make the best of a bad situation. There is absolutely no cost to you unless we successfully complete a short sale of your home.
The Scot Campbell TEAM is here to help. It all starts with a phone call or email... we look forward to helping you.
Questions? Contact Scot Campbell, at 714-960-0700 or email to Scot@CampbellRealtors.com
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