MORE and more homeowners are realizing that doing a Short Sale is a better option for them. Now, choosing the right Agent to short sell is key and of course, I feel that homeowners should understand the process of short selling in order to appreciate the tedious work that we put into a short sale closing, including negotiating between buyers, sellers, buying agents and more importantly, the lenders.
It’s getting to be more difficult to close a Short Sale nowadays, with so many discouraging factors affecting the sale. I really want you to see what we, as agents, go through in order for you to help us make this smooth for everyone.
Some people are just closed -minded and think that the agents are running away with cash for a minimal amount of work towards closing a short sale. On the contrary, it’s a very long and dragging process and a lot will soon give up taking listings.
Here are some tips to understand : FAQs
How do we qualify for free Short Sale agent assistance?
1. Financial hardship – There is a situation causing you to have trouble affording your mortgage.
2. Monthly income shortfall – “You have more Monthly Expenses than Monthly Income.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
3. Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.
Can I short sale my house?
Yes, if both 1 and 2 apply.
1. The home’s market value has dropped. Comparable sales must substantiate that the home is worth less than the unpaid balance due the lender.
2. The homeowner has fallen on hard times. The homeowner must submit a letter of hardship that explains why they can not pay the difference due upon sale, including why the homeowner has or will stop making the monthly payments. A hardship letter is needed, to be established.
What is the effect of a foreclosure on my credit score?
A foreclosure on your credit report can take 7-10 years to remove and can cost your credit rating (FICO) up to 200-280 points which is a very big hit, assuming you won’t have a deficiency judgement.
What is the effect of a Short Sale on my credit score?
Clients have informed us that a short sale will show up on your credit report as a ‘settlement’, ‘settlement for less than owed’ or a “pre-foreclosure in redemption”. A short sale credit score can drop by 50-100 points. Best of the worst-case scenarios.
There is no way to predict exactly how a short sale is going to affect your credit for it. We’ve had some clients who have mentioned that they’ve been able to rebuild their post short sale credit score in as little as 12 months. Other people who have not maintained their credit with other items, well, it’s probably going to take a little bit longer in order to rebuild their credit.
What are the Short Sale Tax implications?
The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.
This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.
More information, including detailed examples can be found in Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments. Also see IRS news release IR-2008-17. Ask your accountant to utilize Form 982 with your Return. Please talk to your CPA.
Foreclosure of my home is very close to happening. Is there enough time to for a Short Sale Agent?
Yes. The foreclosing party – in most cases a lender – can stall a foreclosure up to the final day of the process. Today, many lenders will stall a foreclosure with as little as a phone call from your short sale agent explaining that you are trying to sell, and almost all lenders will stall a foreclosure with a legitimate contract. For real estate professionals who understand foreclosures and short sales, there is time available until the foreclosure process is complete.
What is the typical Short Sale Agent process?
1. Seller signs a listing agreement with a Short Sale Agent.
Starts to market the property and encourages offers for the highest and best value.
2. A Buyer submits an offer to your Short Sale Agent.
This is when we start to complete a Short Sale package to lenders and submit the offer. This is also the part where the agents have to make sure the SS package is complete and updated. This is where the clock starts to tick and depending on the lender/s you could be waiting from one month to six on. Its very important that you update your lender with your latest paystubs and bank statements. Your agent should call the lender on a weekly basis and you should at least get updates on a bi-weekly basis to know what is going on. Its also important to monitor the foreclosure process, if its been accelerated by the lender.
3. Seller’s lender accepts the buyer’s purchase offer.
Hopefully your buyers are still with your property because usually buyers throw multiple offers and see which one sticks. Once, accepted then their loan process begins, this is also an uphill battle with buyers-lenders getting their loan approved.
4. Transaction closes, the lender releases the lien.
Make sure your lien release and deficiency waivers are on the SS approval letter, if you have two liens or more, the process gets scarier and tougher. Again depending on the investors and servicers.
How do I Short Sale my home?
Contact us for a FREE Consultation. Call Short Sale Agents Kenneth Go at (562)508-7048.
All our services are FREE ALL OUR SERVICES ARE FREE.
You relax. We do the work!
We will negotiate to clear all deficiencies.
Move-out assistance up to $3,000 through HAFA and $5,000 through direct investors.
* * *
Thanks for your inquiry. Please call Ken Go of 1st Innovative Finance Group at (562)508-7048 or write to This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
(Advertising Supplement)
| < Prev | Next > |
|---|
