• Unemployment
• Divorce
• Medical Challenges
• Death of a Spouse
• Property depreciation due to no fault of the homeowner

Q. What do I have to pay at closing?
A. Nothing

Q. Do I have to pay the REALTOR?
A. No. All of our fees are paid by the bank as part of the short sale.

Q. Can I make any money off the sale of my house?
A. No. All proceeds will go to the bank.

Q. Is it a good idea to not use a REALTOR and do a private sale with an individual?
A. No. If you submit a private offer to the bank, they will be less likely to accept it. A bank estimates what it will accept based on the “Market Value” of the property. If the home has not been listed on the “open market” the bank will have no reference point as to what the market will pay. If the property has been on the open market for three months listed and marketed by a REALTOR, and it has received no offers, the bank will be more inclined to accept an offer.

Q. In a Short Sale what happens to my credit?
A. It depends on how the creditor reports it to the credit bureaus. Generally, a foreclosure will show up as FORECLOSURE, and can stay on the homeowner’s record for up to seven years. Anytime the homeowner applies for a new loan or has their credit run the foreclosure will likely show up. More and more employers are running credit for job applicants. A Short Sale is listed as SETTLED DEBT, and is much less harmful to the homeowner’s credit than a foreclosure. It is not Paid in Full as it would be if the full balance was paid off on the mortgage, but a Short Sale is much better credit wise than a foreclosure.

Q. What is my tax liability?
A. In a Short Sale, it is possible the bank could issue a 1099-C to the homeowner for the deficiency in what the lenders are forced to cancel. This means the homeowner could face a taxable income of that difference on their taxes. If the homeowner has a negative net worth (including the house), this can often be canceled out so there are no tax consequences that occur from the 1099-C.

The lender will sometimes ask the homeowner for an unsecured note for that cancelled debt or a portion of it. This is similar to an IOU. We have been very successful at negotiation to having NO unsecured note and that homeowner’s cancelled debt considered settled at closing. However, when it must be done to make the Short Sale go through, often a partial amount of the cancelled debt is required in the form of an unsecured not often at great terms, such as 0% interest. In those situations, the other portion of the cancelled debt is considered settled and forgiven. Contact your own CPA for more information.

Q. How long does this take?
A. It all depends on the amount of time it takes us solicit an offer and get the banks approval. Typically it will take 60 to 90 days.