Short Sale Process
Walk Away and Owe Nothing Thru a Real Estate Short Sale. (WE DO NOT CHARGE YOU NOTHING)
A Short Sale costs you nothing. We get paid by your lender. It is well known that a lender will net more money on a short sale than taking a home back thru foreclosure. Why? A lender saves money on interest, attorney fees, and other related foreclosure costs. A recent study done by the Boston Consulting Group showed that a lender will reduce their losses considerably with a short sale. In fact, they reduce their losses by 20% on average when accepting a short sale versus foreclosure.
Here is what we will do to help you with your short sale.
Step #1: We put the home up for sale and market it to find a buyer. We do all the standard stuff that it takes to sell your home, just like all the homes we’ve sold in the past.
Step #2: We gather all of the necessary documents to process the short sale.
Step #3: After we find a buyer who wants to purchase the property, we contact your lender’s loss mitigation department. We ask them what documents are necessary to submit the short sale package and how to send it to them.
Step #4: We submit the buyer’s offer and all the short sale paperwork to your lender. We have a complete checklist that we follow so everything is submitted properly.
Step #4: We follow up with your lender to negotiate the short sale. There is a lot of time involved at this stage of the process. Many lenders short sale departments are busy with an avalanche of file. However, with a little patience and perseverance we are able to get the lender to approve the short sale.
Step #5: Upon lender approval we then coordinate everything to a successful closing. We follow up with all the inspections, appraisals, surveys, and the buyer’s financing.
Step #6: Closing. Everything is completed and you are now out from under the burden of debt and stress. Most sellers are so glad to be done with the stress and uncertainty. It’s closure.
The Benefits a Short Sale Offers
There are many reasons that a short sale is better for you. We put together the comparison below so you can see the advantages a short sale offers and compare them for yourself.
Issue
Foreclosure
Short Sale
Can I get a Fannie Mae Loan in the Future?
The current Fannie Mae Guidelines require you to wait 5-7 years before getting a new loan.
Current Fannie Mae Guidelines allow you to purchase another house after 2 years.
Can I get a future loan from any mortgage company?
Any future application will require you to answer the question, “Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?” you’ll have to answer that question yes.
You can state No because you short sold your home. You only have to say yes if the bank completes the foreclosure.
Credit Score Impact
Your score is typically lowered by 250 to 300 points, or even more. This often stays on your credit score for over 3 years.
Only late payments show up. After a short sale, the mortgage is normally reported as “paid in full, settled.” This lowers your score as little as 50 points if all other payments are being made. Oftentimes, this is off your credit report in as little as 12 months.
Will I owe the bank any money for the shortfall?
Many lenders take 12-18 months to foreclose upon a property and resell it. This dramatically increases the loss and makes any deficiency judgment potentially bigger.
Few lenders ask for a promissory note on a short sale. When they do ask for one, they request the borrower repay them a percentage of their loss. As an example, on one property we sold, the bank lost over $120,000. They settled with the seller for $25,000 to be repaid over 15 years with zero interest. The seller’s monthly payment was only $138.89.
If you are interested in doing a short sale, then call me at 562-881-4985. Or fill in your information in the form below. I will contact you to discuss your options. Remember I’m here to help you in any way that I can.
