Homeowners FAQ’s

Why would my Lender want to allow a short sale to help me?
The reason is simple: the lender is taking a loss on the property regardless, but a short sale will help minimize their losses because it often has a better return on investment for the lender than a foreclosure.
Will the Lender approve a short sale even if I am current on my mortgage?
Yes, in most cases. As stated before, to receive a short sale approval you need to show a hardship. However, a hardship doesn’t always have to be due to financial reasons – we have helped people who needed a larger home, wanted to downsize, or even relocated to a better school district. To learn more, we suggest that you call us so we can discuss your particular situation and help you determine whether or not a short sale would work.
How do I qualify for a short sale?
You qualify for a short sale if your property is now worth less than is owed AND you can show a hardship that would result in the inability to meet your obligation.
What is a Hardship?
Death or illness, divorce, loss or reduction in income, relocation, inability to sell or rent property, and business failure are some examples of homeowner hardships.
Can I still short sale my home even if I have 2 loans (or more)?
Yes, however it may require separate negotiations with each lender.
Can I still do a short sale even if the property is in poor condition?
Yes, in fact, lenders are even more motivated to do a short sale on properties in poor condition. They know that their losses start to skyrocket when a home is in need of repairs.
When should I start my short sale?
As soon as possible! Of course it is best to start before you go into pre-foreclosure but we can also process a short sale while the property is in foreclosure by getting the sale date postponed.
When do I have to move?
As in any typical sale of a house, you must move upon close of Escrow.
How does a foreclosure and a short sale show up on my credit?
Foreclosures show up as “FORECLOSURE”, and can stay on the record for seven years or longer. This makes it difficult for you to obtain any type of new loan in the future. It must also be disclosed on job applications. A Short Sale is listed as “SETTLED DEBT” or “PAID AS AGREED”, and is much less harmful to credit. Please consult a credit company for more information.
What liability do I have when doing a short sale?
In a short sale, lenders must report the loss to the IRS and will issue a 1099 for the difference in what the property sold for and what was owed. However, the Mortgage Forgiveness Act of 2007 temporarily waives these taxes for debts forgiven for primary residences. In some states, the bank also has the right to ask for an unsecured note (similar to an I.O.U.). As part of our negotiations, we ask the bank to consider these debts settled. The bank could also sue for a Deficiency Judgment. This may vary from state to state.
Please consult an accountant or an attorney for your tax or legal questions.
What are the advantages of a Short Sale?
The common-known benefits are avoiding foreclosure and minimizing the impact on your credit score. Also in a short sale, the seller is the one who is in control of what happens to the property (ie., choosing the best offer, determining close date, etc). However, there is often those less talked about benefits: financially it can allow the seller to start over or help improve their financial well-being, and emotionally it can help achieve peace of mind because you are now relieved of the stress and burden.
Is there any cost to me?
Absolutely not.
If I do not live in the property, can I still do a short sale?
In addition to primary residences, a short sale can be achieved on any type of property: rental properties, raw land, 2nd homes, mobile homes, and commercial properties.
How long does a short sale take?
On average, a short sale takes about three months, from submission to close of escrow.
How do I get started?
Either fill out our contact form on this website and we will get in touch with you as soon as possible, or call us at (949) 340-5457.