INFO@SHORTSALECENTER.NET |888.782.5557

FAQs

Frequently Asked Questions About Short Sales.

You probably have many questions about short sales, the process, and our company. Below you will find the answers to Frequently Asked Questions. You can also email us HERE or call us a anytime, toll free at 1-888-782-5557 to speak with a specialist. Throughout the entire process, we’re here to provide all of the short sale help that you need. Best of All, our services are 100% free.

Q?

What is A Short Sale?

A.

Short Sale Definition: A short sale or “short pay” is a type of real estate sale where the lender allows a property owner to sell a property for less than what is owed on the mortgage balance. The proceeds of the sale go to the lender, and in return, the seller is able to avoid foreclosure.  For example, If Jimmy Q’s current loan balance on a property is $600,000, but the property is now worth only $300,000, Jimmy might be able to short sell the property. This means that Jimmy would sell the property for market value (around $300,000), regardless of the loan balance. All of the proceeds from the sale would go to the bank. Out of these proceeds, the bank would pay realtor commissions, their portion of title/escrow fees, and any other pre-approved closing costs. For taking action (and saving the bank from a costly foreclosure) Jimmy would be rewarded with not having a foreclosure recorded on his credit. Lenders only agree to short sales if they receive a full and complete package meeting the specific guidelines of that particular lender.

Q?

How Do I Know If it is My Best Option?

A.

In most situations, people have 3 options available to them.  The first is to keep the property. This means first coming current on the mortgage (paying all past due payments and late fees), and then making the mortgage payments every month. The second option is to short sell. The third is to foreclose (we NEVER recommend a foreclosure). Here are some reasons why many people decide to short sell:

  • They owe more than their home or investment property than what it’s worth, and it does not make financial sense to keep the property.
  • They are struggling to make the mortgage payments.
  • Their interest rate, monthly payments, or mortgage balance has been (or will be) increasing.
  • Relocating to a new area and paying for the current property and a new living situation is not feasible.
  • They have been denied for a loan modification, or provided a “temporary” plan.

Q?

How Do I Short Sell My House to Avoid Foreclosure?

A.

The first step is to contact us either by phone at 1-888-782-5557, by email us (Info@shortsalecenter.net) – and we will answer any questions you may have.  If a short sale is right for you, we will email you a list of the documents that your lender will require for your file.  Finally, we will put you in touch with a local real estate agent that covers your area (we cover all 50 states – even Alaska, Hawaii and Puerto Rico!), so the property can be listed for sale by a local exert.  The real estate agent’s role is to list and market the property to receive an offer from a buyer. Our role at our headquarters here in Los Angeles, is for our team of short sale specialists do all the work with your lender(s) to get the short sale approved. This two-teamed approach lets every person concentrate on what they do best, and is the one of the reasons why we are so successful.

Q?

How Much is This Going to Cost Me?

A.

Unlike some companies, we charge absolutely nothing to the homeowner. In fact, MakingHomeAffordable.gov states that soliciting money for short sale negotiation and consultation services is one of the most common types of home relief scams. As reputable company, we will never ask you for money at any point in the short sale process.

Q?

If You Are Not Going to Charge Me Anything, Then How Do You Get Paid?

A.

When your short sale is completed, your lender will pay a commission to the local real estate agent we assign to your file. We then share in that commission. We do not get paid anything unless we are successful in completing your short sale. When the short sale is complete, the lender pays us, not you.  We will never ask you to pay us anything!

Q?

Do You Offer Loan Modification Services?

A.

Absolutely not! We never have, and never will offer any type of loan modification services, even if you offer to pay us! You should speak with your lender directly if you are interested in a loan modification, and never a third party company.

Q?

Is a Short Sale Better than Foreclosure?

A.

Foreclosing on a property will negatively effect your credit score significantly. Not only will this drastically reduce the score, but will actually state “foreclosure” on the credit report. This can prevent you from obtaining a mortgage loan, car loan, or even a credit card in the future. Even after many years, you will always be required to disclose that you had a foreclosure when applying for a mortgage loan, and other loans. This can seriously affect one's ability to obtain financing and credit in the future. It is also common for employers to deny applicants for jobs based on poor credit ratings. Finally, it is very common for the lender (or lenders) to pursue you for money after a foreclosure. There can even be additional tax consequences as well.

Some short sale programs guarantee that the bank cannot pursue the seller for any money after the short sale is completed. Some states (like California) have laws preventing the lender from pursing the seller for any money after the short sale. Because these laws usually do not exist through foreclosure, we ALWAYS recommend a short sale when comparing it to a foreclosure.

Q?

What About Tax Consequences of Short Sale?

A.

In 2007, the IRS passed The Debt Relief Forgiveness Act and Debt Cancellation. This allows homeowners to short sell their owner occupied properties with a deficient amount of up to 1 million dollars for singles and 2 million dollars for married couples with no tax consequences on the deficient amount. This law expired at the end of 2013, and then was retroactively re-applied at the end of 2014, covering those who short sold in 2014. As of the law was again extended for 2015, and again for 2016. As of now, the law is technically expired for 2017, however it may be extended.

There are additional guidelines in place to minimize or even completely eliminate the tax liability even if The Debt Relief Forgiveness Act and Debt Cancellation is not extended. Be sure to to consult your tax professional for more information on tax consequences of short sale. You can also visit the IRS website at www.irs.gov.

Q?

Will I Have to Move Out Immediately If the Lender Agrees to the Short Sale?

A.

No. Even if someone makes an offer on the house immediately, it can still take three to four months for the short sale to be approved at the bank. However, you are able to move out right away if you need to.

Q?

What Types of Real Estate can I Short Sell? Do You Negotiate Commercial Real Estate Short Sales?

A.

Any type of real estate can be short sold. We have completed short sales on houses, condos, multi-unit properties,  commercial buildings and even raw land. You can short sell your primary residence, a second home or an investment property.

Q?

How can I get money to move out of my property?

A.

When applying for a short sale, the application must include a request for relocation money / relocation assistance, for the lender to consider approving money to go to the seller. Up until December 30th, 2016, the HAFA program was in place. HAFA stands for “Home Affordable Foreclosure Alternatives.” Under the HAFA short sale program, the government offers mortgage lenders and servicers an incentive for allowing homeowners to short sell their homes. The deadline to apply for the HAFA program was Dec. 30th, 2016. However, sellers may still be able to receive relocation money without going through the HAFA program.

Q?

How Does a Short Sale Affect My Credit? How Long Does a Short Sale Last on My Credit?

A.

A short sale will affect the credit, however, significantly less than a foreclosure. In addition, once a short sale is completed, you will no longer continue to generate mortgage lates on your credit. As a result, the repairing of the credit should start immediately. There are currently several lenders and loan programs that allow a borrower to obtain a new home loan to purchase a property shortly after a short sale is completed. Through a short sale, a foreclosure is NOT recorded or even mentioned on the credit report.

In regards to privacy, when someone foreclosures, a public notice is filed and a public auction is held. However, our short sale process ensures that the seller will maintain their privacy. We do not require any signs on the property and there is no public notice or auction.

Q?

Do I Need to File a Separate Application to Apply for Relocation Assistance?

A.

We handle your entire process from start to finish, and will provide you with the necessary documents to complete in order to apply for relocation assistance. We ensure the application is complete and submitted to the correct department at your lender. Often times, local realtors who are inexperienced with process submit documents or files incorrectly to the lender. This can result in not qualifying for relocation assistance.

Q?

Can Any Real Estate Agent Handle My Short Sale?

A.

Unfortunately, a lot of real estate agents and brokers claim to know how to complete short sales. However, short sales involve knowledge and experience of the intricate guidelines of every lender and short sale program.  The fact of the matter is: 90% of real estate agents do not have the knowledge or experience to complete short sales.

We have successfully completed hundreds of short sales nationwide. We have worked with every major lender and credit union, and complete short sales with 1st loans 2nd loans, home equity lines of credit, tax liens, and even judgments.

Q?

What About Real Estate Short Sale Ethics? Are You Really The Best Short Sale Negotiation Company?

A.

Many top industry professionals think so! We are licensed by the CA Bureau of Real Estate and endorsed by the CA Secretary of State. We abide by the strict Realtor Code of Ethics, and we are well respected within the industry for our extremely high standard of real estate short sale ethics. Of course, the opinions that matter most are those of our clients…Read our Testimonials page and you’ll see that we don’t take the title of Best Short Sale Negotiation Company lightly!

Q?

Can I Short Sell if my Payments are Current?

A.

Yes.

Q?

Can I Short Sell if I Missed or am Behind on My Payments?

A.

Yes.

Q?

Can I Short Sell if I Already Received a Foreclosure Notice?

A.

Yes.  In most cases, the lender will stop the foreclosure process in order to complete the short sale.  This is because a short sale usually saves the lender a significant amount of money and time in comparison to a foreclosure.  However, we must contact the lender immediately to delay any further action and negotiate a short sale.

Q?

Can I Short Sell if I have Already Received a Loan Modification from my Lender?

A.

Yes.

Q?

Can I Short Sell if I am in the Process of Applying for a Loan Modification?

A.

Yes.

Q?

Can I Short Sell if I’ve Been Denied for a Loan Modification?

A.

Yes.

Q?

All of This Sounds Too Good to Be True! Why Would a Lender Agree to Short Sell Versus Foreclosure?

A.

Lenders have several factors to consider when weighing a short sale versus foreclosure. When a lender forecloses on a property, it could cost them about $60,000 in attorney fees. The lender then has another property they have to deal with. They have to find an agent to sell the property, maintain the property, etc. They would also most likely get LESS than what the house would sell for in a short sale. In most cases, the lender would rather you short sell, then foreclose.

Q?

Why Does the process Take So Long?

A.

Over the past few years, the number of homeowners applying for short sales has exploded. In addition, lenders are overloaded with incomplete short sale packages’ and real estate agents who do not understand the process.  Although Lenders are continuously increasing their staff to handle the workload, files still have to wait their turn and are handled in the order they are received.  In addition, every lender and loan servicer has specific guidelines that must be met.  This is why working with an expert is crucial in ensuring your file will move along and get approved.  Finally, most mortgage loans are not actually owned by the lender.  Usually, the lender is just a “middle man” to the actual investor that owns the loan (and pools of thousands of other loans). The servicer has to present the package to the investor, who in turn allows for an approval.  We have the experience and the knowledge to ensure that everything is done as quickly as possible.

Q?

Can You Provide me with a Hardship Letter Sample?

A.

Yes, we can provide this upon request to our clients. However, every situation is different, so it is important to be honest and simply explain your situation in your hardship letter.

Q?

How Does the Process Work? What Are the Steps?

A.

#1: Initially, the homeowner has all his / her questions answered by one of our short sale specialists, who will be with the homeowner through the entire process.  The specialist will email the homeowner a list of documents needed to start the process of a short sale.

#2: As the homeowner is gathering the documents, we will have the local real estate agent, which has been pre-screened to meet our criteria, contact the homeowner to schedule a time to meet in person, fill out the listing agreement, take a few photos of the house, etc., and get the property listed for sale

#3: The real estate agent will show the property, or schedule times with the seller for when clients interested in potentially buying a short sale home would be viewing the property.

#4: Once an offer is received, the offer is submitted to the bank along with the documentation and short sale hardship letter that we requested from the seller. Our job is to follow up with the lender on a daily basis, collect all necessary documents, and ensure the file will move along as fast as possible. Without constant follow-up, bank often loses or stops working on files. In about 60 days, the bank will order an appraisal on the property. This gives the bank a rough idea of what the house is worth. Once the appraisal is completed, the bank will weigh it against the offer received.

#5: As long as the offer is close to the appraised value, the bank will issue an approval. Or, if the bank feels the offer is too low, they will counter the offer. At this point it is just a negotiation with the bank, and part of the battle is knowing how much to offer on a short sale.  Once an agreement is made, the lender will issue the short sale approval letter.

#6 Now that a short sale approval letter is received, it is up to the buyers to close. The buyers will normally do their own appraisal, inspections, etc.  Once the buyers have obtained all their financing, they can close and the process is finished!

We will take care of everything for you, from submitting short sale offer and negotiating with the lenders, to marketing and selling the property. You pay absolutely nothing and focus on your life instead of foreclosure. We are currently working on a short sale process video detailing the steps and short sales strategies that you need to know when short selling a home. You can do this! We can help!