Short Sale Questions and Answers
What you should do to avoid foreclosure. Please read the following question and answer monologue to better inform you on your available option.
What is a Short Sale? -
A short Sale is defined as an agreed upon negotiation between the bank and the seller (through professional representation) to allow the seller to sell the property for less than the amount owed to the lender or lenders due to financial hardship. The seller must first qualify through proof of financial hardship for the bank to approve the process. The approval is an agreement from the lending institution to accept less than the amount owed and we can in most cases, negotiate for the the bank not to seek a deficiency judgement.
What’s the advantage to a short sale oppose to foreclosure?-
Foreclosure will definitly have a far greater negative impact on your credit score than a Short Sale. In fact according to the credit reporting bureaus, Foreclosure is the worst possible mark on your credit report. Short Sales, assuming the lenders even report them are said to impact your credit scores much less than a foreclosure and are expected to come off your credit rating within two years. Foreclosures will negativley mark your credit score for 7 years according to the credit reporting bureaus. In an approved Short Sale, the lender that initiates the foreclosure proceedings will not seek any deficiancy judgements assuming a successful closing . For questions regarding the 2nd mortgage holders position please contact Jose Pastor at Jose@GreenArborRealty.com for a more detailed answer to your specific situation.
How does my Realtor get paid? -
The Realtor’s commissions are paid from the proceeds of the sale of the house. The lender approving the Short Sale will allocate a small percentage for real estate commision and closing cost. The seller has absolutely no out of pocket expense for Realtor’s commissions nor the transactions closing costs. If a Realtor is charging you a fee to do a Short Sale, you need to run away or at least escort them out of your house! This type of act would show that the individual is not practicing their Code of Ethics as a Realtor. A true Realtor’s Code of Ethics would not tolerate that type of behavior. Realtors that hire a third party Short Sale company are basicall telling you “the seller” that they do not know what they are doing. Many Realtors use third party Short Sale companies to do the actual work and they get paid a referral fee. This paractice will make it more challenging to get an offer on your property. The third party Short Sale companies charge the buyer an additional fee above and beyond there actual offer. This can make selling your home more challenging. Beware that some of these compnies are not even licensed to sell real estate!
Do I approve the offers or does the bank have a say in it?-
You, the seller will initially approve any offers that come in. However there is no binding contract until the Lender approves the offer as the third party. If there is a 2nd mortgage holder, then that lender will also have to approve the offer. Here is where an experienced Realtor that is knowlegable will shine! This is where the deal can fly or die!
How Do I qualify for a Short Sale? -
To qualify for a Short Sale please contact Jose Pastor at Jose@GreenArborRealty.com or call 503-805-3770 to go over your specific situation to see if you can qualify for a Short Sale.
- For Answer to the following questions and any other questions that you may have, please contact us at Jose@GreenArborRealty.com or call Jose Pastor @ 503-805-3770, Principle Broker / Short Sale Manager.
- If the bank approves the Short Sale and forgives the deficiency from the sale, how do they recoup that money?
- Does Short Selling my house require me to fill out a lot of Legal documents?
- If I have already recieved a Notice of Default from the bank, can I still do a Short Sale? YES, call us immedialty because the clock started ticking towards foreclosure!
- Do I have to move from the house during the Short Sale?
- Can I use my regular Realtor to do a Short Sale? No this is not advisable unless you know that he has indeed succesfully closed several Short Sale Transactions. Most general residential Real Estate Agents do not have the experience to successfully procure a Short Sale. An inexperienced agent can hurt your chances of getting an offer approved. The probability to end up in foreclosure is high. Your Agent needs to be highly experineced in Short Sale transactions and needs to think outside the box in order to close the deal. You can’t afford to be a “practice run” for an experience seeking agent!
- If you are still not sure about which route to take, let me help you, Foreclosure is in fact the worst thing you can do for your current situatuation. Abandoning your financial responsabilities is not the way to go! A Short Sale is one of the best ways around abandonment!