Have Short Sale Questions?
Call 661-703-6386
Short Sale is quickly becoming a household name these days. The term SHORT SALE is rather confusing an often mistaken for a quicker closing (less than the normal 30 day period) of a real estate transaction. This could not be further from the truth! The actual definition of a Short Sale is this:
"A short sale is the sale of an asset for less than the loan balance"
So the "SHORT" part doesn't mean fast it means that the bank will not get what they are actually owed, a "short payoff"
Why is it to my advantage to do a Short Sale?
Do you owe more on your home than it is worth? Are you struggling financially to make your mortgage payments? If your answer is YES, then a Short Sale may be just the answer to regain your financial stability. That's an advantage right?
How do I know if I qualify for a Short Sale?
If you have a hardship (loss of work, divorce, illness etc) you will more than likely qualify for a Short Sale. The bank will ask for your income and expenses to prove your loss, however some banks are more lienient and will just approve your short sale regardless. Different mortgage lenders have different criteria.
How will a Short Sale affect my credit?
 |
| Is this the road your headed down? |
Both a Short Sale and Foreclosure will have a negative impact on your credit, but let's put in in perspective: anytime that you do not pay a creditor what you owe them has an impact right? right. A Short Sale will appear as a settled debt on your credit report and on average the loss is about 100-200 points. So if you have a credit rating of 720 and the short sale hits you with 100 points, your still in pretty good shape. You can start rebuilding this score immediately if you have credit cards in good standing. If you let your home go to Foreclosure it will stay on your record for 7-10 years.
How much will this cost?
Nothing. There are no fees, commissions or any costs for you to do a Short Sale. That's hard to believe, I know. On a Short Sale the bank acts as the seller. You sign all of the paperwork like you would if you were selling but the bank pays all the costs. Yes, they even pay the Realtor commissions.
If I Short Sale my home will the bank come after me for the difference?
No, not usually. In some cases depending on the bank they may ask you to sign a note agreeing to pay the difference but this is very rare. We can usually get a full release from the bank for the amount owed.
What are the tax consequences to a short sale?
The balance of the loan is typically written off by the mortgage lender, but they may ask you to pay taxes on that amount and send you and IRS Form 1099. However, due to the Mortgage Debt Relief Act of 2007 you will not be required to pay taxes if you short sale your primary residence before 2012. Consult your tax professional for any further questions regarding tax ramifications of a short sale.
How long will this process take?
Like mentioned before, a short sale is anything but short. a typical short sale can take anywhere from 2-6 months depending on who your mortgage lender is. It may take longer if you have more than one mortgage lender (i.e. line of credit, junior mortgage, etc).
If your are ready to start the Short Sale process or have any questions that you would like personally answered please contact:
Jenny Cameron, Realtor
Short Sale Specialist
Short Sale Specialist
Phone: 661-703-6386
Email: Jenny@MyPoshProperty.com
DRE# 01886687
