Short Sale Q&A
What is a Short Sale?
When the sale of property produces less proceeds than the total pay off for all loans, liens and other costs associated with the sale, the sale is "short". Short to whom? Short to the Lender(s) and any lienholders who have a monetary claim against the property.
Why would a Lender accept a Short Sale?
Time is Money. Foreclosure action is expensive and lengthy. During the 12 month or longer foreclosure process, the property is a non-producing dud that is declining in value every day. If the property becomes vacant and/or vandalized, it will cost the Lender even more in repairs, maintainence and security. When foreclosure is complete, the Lender must still hire a local Broker to list and sell the property. The Lender will compare the cost of the Foreclosure vs the cost of Short Sale. If there is little or no equity in the property, the Lender will have to conclude that he is better off accepting a short and immediate sale.
If you are unable to pay your mortgage now or foresee that you will be unable to pay the mortgage in the near future, when the interest rate re-sets, a short sale may be the only pro-active option you can take to try to avoid foreclosure. Doing nothing assures foreclosure.
What are the benefits to me of doing a Short Sale?
1. You get immediate debt relief without adding any cash to the transaction. All costs of the sale will be paid by the Lender and the Buyer.
2. You avoid public notification of your debt, default and loss of property.
3. Your mortgage debt(s) are marked "Settled" on your credit report. You will retain your ability to obtain credit. "Foreclosure" on your credit report will severely damage your credit rating for major and minor purchases for years.
How do I know if I qualify for a Short Sale?
Everyone's situation is unique and requires individual analysis and attention. A CoronaRiversideHomes.com team meamber will evaluate your situation and determine if you qualify for a short sale. We can also make you aware of other options available to you and we are happy to refer you to the proper professionals. If you want to discuss your situation by phone, feel free to call us Toll Free: 800-728-7118.
Are there consequences to doing a Short Sale?
All the loans related to your property will be settled. The Lender(s), however, is obligated to report the loss to the IRS and issue you a 1099. Debt relief is considered "other income". You are advised to consult a tax professional to understand how this other income will be worked into the tax return for the year of the sale.
Do I have to stop paying my mortgage to qualify for a Short Sale?
NO! It is in your best interest to continue making payments as long as you can. Not making payments
will only increase the Lender's 1099 declaration.
Do I have to have a Notice of Default to qualify for a Short Sale?
NO! A Notice of Default (NOD) is the first step in the foreclosure process that starts a very strict time line of legal action. Our goal is to forestall the issuance of the NOD so that the property can be sold and successfully closed.
What if I already have a Notice of Default ?
CoronaRiversideHomes.com can still help you with a successful short sale if you already have an NOD. However, you must contact us IMMEDIATELY because time is very short and there is much work to do.
Where do I go after the Short Sale is complete?
CoronaRiversideHomes.com will continue to be at your service until you are comfortably resettled in another home. We will help you move on to a brighter future.
When should I contact CoronaRiversideHomes.com?
If your mortgage is already overwhelming you or you are expecting it to re-set at a higher % rate soon, or you have received an NOD, contact us NOW!! Don't waste time. Act fast! A successful short sale depends on you giving us the time needed to complete each of the many steps of the short sale process.
How can I protect myself from real estate predators?
Beware of creative predators who take advantage of desperate people in desperate times! We are on constant alert to recognize deceptive transactions and practices. CoronaRiversideHomes.com will not knowingly be involved in activity that is illegal, unethical or violates our agency relationship with you. We work in your best interest, present and future.
