The Home Owners and Realtors Guide to Short Sales: Step by Step

Short Sale Services
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In some states, this amount is known as a deficiency. A lawyer can determine whether your loan qualifies for a deficiency judgment or claim. Most short sales in California carry no tax penalties anymore. Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect. Now, if everything goes well, the lender will approve your short sale. As part of the negotiation, you might ask that the lender not report adverse credit to the credit reporting agencies, but realize that the lender is under no obligation to accommodate this request.

Credit report status often not negotiable.

Foreclosure: It’s a progression

The Realtor and Home Owner's Guide to Short Sales: Step by Step [Loren K. Keim] on *FREE* shipping on qualifying offers. This step by step. through a real estate short sale. In this practical guide, I'll provide step-by-step instructions for modification or selling your home for less than you owe the bank(s ).

If you are considering buying a short sale , there could be drawbacks. For your protection, you should:.

What Is a Short Sale?

The Balance uses cookies to provide you with a great user experience. By using The Balance, you accept our. Home Buying Foreclosures. By Elizabeth Weintraub. You will want to talk to the "real estate short sale" or "work out" department, and try to get the name of the negotiator. Your real estate agent can also handle this step for you, in many circumstances.

If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan.

The letter should include the following: Property address Loan reference number Your name The date and effective time period Your agent's name and contact information. Your closing agent or lawyer should be able to prepare this on your behalf. If the bottom line shows cash to the seller, good news, you will probably not need a short sale. This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or a truck ran over your entire family, but lenders are not particularly empathetic to situations involving dishonesty or criminal behavior.

Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. It might show up under "status modifier," or the term might be contained in the marketing comments.

Choose that field as your search term.

Understanding The Short Sale Process in NJ

The "third party" designation sometimes means that the seller has not yet submitted the required documentation to the lender to be approved for a short sale. Ideally, the seller has done this already, meaning that the approval process is in progress. Read the listing carefully. You might be looking at a " contingent short sale ," which indicates that the home isn't for sale or that only a backup offer will be considered.

You can also check courthouse filings for preforeclosures. The lender must file a foreclosure complaint in many states to start the foreclosure process, so a public record would exist of this event. Lenders won't even consider a short sale unless the seller is seriously in arrears with the mortgage, and foreclosure proceedings have most likely been started if the property owner is that far behind with the payments.

Understanding The Short Sale Process in NJ

Such a seller might not even have contemplated a short sale yet, but might be willing to talk with you or your agent and explore the possibility. Lenders typically want proof that the seller has no option other than a short sale or foreclosure:. Properties with a wide gap between fair market value and the outstanding mortgage balance are often your best bet. They're likely short sale candidates because a foreclosure sale is not likely going to generate enough funds to cover the mortgage. And why would a lender insist on proceeding with the time and expense of a foreclosure only to potentially suffer a greater loss?

Your offer should closely align with the home's fair market value—and the more earnest money you can put down, the better.

Above all, hire an agent who is well versed in handling short sales and who can advise you of the procedures, including any local customs in your area. The more experience an agent has with short sales, the more likely that the price will be reasonable and acceptable to a lender. The right agent can touch base with the seller's agent before the process moves too far along to determine the status of the short sale.

You might want to move on and look elsewhere if the process has stalled, such as in a situation in which the seller hasn't yet submitted a full short sale package to the lender. You'll also want to know if numerous liens exist against the property. This doesn't necessarily mean a second mortgage.

Short Sale vs. Foreclosure

Can I still do a short sale? A judgment will then be issued by the court for the amount owed andall detriments of the foreclosure process. Our comprehensive online homebuyer course is simple and easy to access on your computer, tablet, and mobile device. In reality, the lender will take their time to recover as much of their loss as they can. We have successfully helped many homeowners settle their debt, salvage their credit, and enjoy a better future! It is greatly advised to the seller, that they find independent legal counseling or tax advice having to do with tax ramifications on the short sale transaction. Don't expect the mitigator to rush through this process.

Tax liens, child support liens, and liens placed by other creditors can all pile on. Every one of these lienholders must agree to the short sale because they're typically in line for payment after the first mortgage lender. These other creditors will not likely receive any money at all from the short sale if the mortgage lender isn't receiving full payment.

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Ask a lawyer for advice and guidance if you have legal questions.