While a short sale is right for most, it is not the right option for everybody. Go here to see other options that may be available to you as a home owner in hardship.
What is a Short Sale?
A short sale is the name for a real estate transaction that occurs when the outstanding loan or loans against a property are greater than the proceeds from the sale of a home.
How can you help me with a Short Sale?
We are a network of experienced Real Estate Agents who specialize in Short Sale throughout California. Our agents aggressively market your home to attract buyers and they oversee the entire sales process of your home and also processing the short sale with your lender from start to finish. This is all at absolutely no cost or out of pocket expense to you in a short sale.
What are the qualifications for a short sale in California?
The main qualification is that you are in some type of financial hardship, that can include but is not limited to, a loss of employment or reduction in pay, death or illness in the family, relocation or job transfer, divorce, increased living expenses, or even unexpected major home repairs that you simply can't afford.
If I sell my home short, will the bank come back after me for the money?
With us, ABSOLUTELY NOT. That's why owners do a short sale. Our agents will work to secure a full release for you at closing. Rarely will a lender ask that the homeowner take back an unsecured loan for all or part of the deficiency balance. Although it has happened, this is a rare occurrence, especially if you are in a true financial hardship.
What happens to all of the money that is forgiven by my lender?
Lenders will typically write off all of their losses on a loan. They will also send out a 1099 for the amount of their loss on the loan, which is commonly called the deficiency. In 2007, Congress passed the Mortgage Forgiveness Debt Relief Act. Unfortunately this act expired just a few years ago. Always consult accountants and appropriate licensed persons in all tax related matters, as their are often ways to avoid tax liability when completing a short sale.
Why would my lender accept a short sale on a California home?
It's all about the money, since it's a fact that the average foreclosure proceeding costs a lender over $58,000. In addition, properties deteriorate in their condition and are subject to vandalism when vacant, ultimately costing them even more money. Banks are in the business of money lending, not property management. For them, it's simply a matter of being cost effective. It seems like a wise decision for them to cut their losses in order to avoid costly foreclosure proceeding since it can actually save them money over a foreclosure.
Who pays your commission?
The bank does. You will pay zero out of pocket in a California short sale. There's nothing up front to pay, and nothing required at closing, period. In a short sale, if you are in a true financial hardship, your lender pays all traditional sellers' closing costs. In addition, in order to cut their losses, lenders will often give relocation incentives of up to $30,000 to home owners in hardship in order to complete a short sale.
How much work does this take?
For you? Not much! We will ask you to gather certain financial information and forms, many of which are used to prove your hardship. From there, our agents will handle the negotiations and details with your bank directly, as well as the process involved in selling your house.
If I am going through foreclosure, is a short sale even an option?
YES, it is. In fact, the bank will usually be more than happy to work with you on a short sale because, again, it saves them money in most cases to sell the house rather that to 'own it' themselves. It is to the bank's advantage, and yours, to work out a short sale. Typically a lender will immediately halt foreclosure proceedings to consider a short sale offer for a California property.
Why is it to my advantage to do a short sale on my home?
A foreclosure will hurt your credit much more than a short sale will for several reasons. One, although some banks report a short sale, some do not. Short sales are typically reported as a "settled in full" or "paid as negotiated". Second, when you do a foreclosure or a "deed in lieu of foreclosure" it is typically five years to qualify for a loan again, where it is typically only two years with a short sale. Third, in the event of a foreclosure or deed in lieu of foreclosure, your lender can come after you for a judgment in the amount you owe in most cases. And fourth, there are often financial incentives from the lender in order to complete a short sale.
Until the short sale is completed, can I continue to live in my home?
Yes, you can. You will not have to move from your home until the closing. In fact, if you are facing a California foreclosure, and we are actively working with your bank, the foreclosure proceedings can typically be delayed. This makes it possible for you to stay in the home for some time so you have a chance to secure other living arrangements.
Can my current Realtor work on a short sale for me?
In most cases, the answer is NO. Many Real Estate Agents do not have the knowledge, experience, or skill it takes to complete a short sale on a house. It is a highly specialized niche and the truth is, the majority of other agents don't want to do them. There are many agents claiming to be "Distressed Property Experts" after taking a weekend training class. There is no substitute for experience. The results of inexperience can be disastrous. Because of our wealth of knowledge and unparalleled industry contacts, our short sale real estate agents make the deals happen, when other agents make foreclosures happen. Our average agent has closed over 50 short sale transactions.
While a short sale is right for most, it is not the right option for everybody. Go here to see other options that may be available to you as a home owner in hardship. If you are trying to decide if a short sale is right for you, fill out our contact form below, one of our short sale experts will be in touch with you shortly. Remember, there is no cost involved, and your information will be held in the strictest of confidence.
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