SHORT SALE FAQ's
Q. What is a Short Sale?
A short sale is when a lender agrees to accept a mortgage payoff amount less than what is owed in order to facilitate a sale of the home by a financially distressed owner. The lender forgives the remaining balance of the loan.
Q. Which is Better, a Foreclosure or Short sale?
Both affect your credit scores, but a Short Sale quite often has less of an impact.
Q. What Are The Qualifications For A Short Sale?
The three primary qualifications a lender may require:
•The current property value has declined below the loan amount.
•The homeowner is unable to make the mortgage payment.
•The homeowner has a qualifying hardship.
•The current property value has declined below the loan amount.
•The homeowner is unable to make the mortgage payment.
•The homeowner has a qualifying hardship.
Q. What Are The Consequences of a Short Sale?
1. Potential IRS Tax Consequences.
2. Deficiency Judgement (does not apply with some states).
3. Blemished Credit Rating.
We recommend consulting with a real estate lawyer and tax accountant to determine if you may have any tax consequences.
2. Deficiency Judgement (does not apply with some states).
3. Blemished Credit Rating.
We recommend consulting with a real estate lawyer and tax accountant to determine if you may have any tax consequences.
Q. Why Would A Lender Agree To A Short Sale?
Lenders typically lose less money when compared to a foreclosure and the additional costs involved:
• Legal fees
• Twice the title transfer fees
• Maintenance of the property prior to sale
• Utilities, HOA fees, vandalism
• Legal fees
• Twice the title transfer fees
• Maintenance of the property prior to sale
• Utilities, HOA fees, vandalism
Q. Why Would A Seller Agree To A Short Sale?
Potential Seller Benefits
1. It typically has less of an impact on your credit rating when compared
to a foreclosure.
2. Your lender may agree to stop reporting missed payments to the
credit agencies.
3. After a Short Sale you're able to buy a home sooner than you would
with a foreclosure.
1. It typically has less of an impact on your credit rating when compared
to a foreclosure.
2. Your lender may agree to stop reporting missed payments to the
credit agencies.
3. After a Short Sale you're able to buy a home sooner than you would
with a foreclosure.
