Frequently Asked Questions
What is a short sale?
A short sale is when a mortgage lender agrees to accept less than what is owed on a mortgage for the sale of a property. For the bank, a short sale is typically faster and less expensive than a foreclosure. For the home owner, advantages include avoidance of a foreclosure on their credit history.Given the unprecedented and overwhelming number of losses that mortgage lenders have suffered from the current foreclosure crisis, they are now more willing to accept short sales than ever before. This is great news for borrowers who are "under-water" or in other words those who owe more on their mortgage than their property is worth and are having trouble selling to avoid foreclosure because of this. They are type of distressed borrower who needs a short sale the most.
How does the short sale process work and how long does it take?
For an overview of the short sale process, please see the Short Sale Overview page.What are the next steps to get started?
Check out the How To Get Started for a quick overview of getting started with your first short sale.What is your role in the process?
We work with you, your client, and the buyer's agent to get the bank to approve the sales price of your property. We do this by submitting a "short sale package" to the bank. This package consists of various financial information you provide and a purchase contract. We call the banks twice per week to keep the process moving along as quickly and smoothly as possible.Why should I work with you?
We are a leading authority for short sales and loan modifications, having helped more than 435 families across 16 states. We don't charge the realtor or homeowner but collect our fees from the buyer. The Realtors who work with us find that they make more, work less, and close more of their short-sale listings than using any other approach. So relax and let us handle the often difficult short sales process. We look forward to hearing from you!What are the tax implications of a short sale?
There are tax implications, but if you are selling your primary residence, there are no taxes due. Your client should be aware that the bank may send them a 1099 for the deficiency. They should file Form 982 "Reduction of Tax Attributes Due to Discharge of Indebtedness" to avoid having to pay taxes. If the property is a rental property, there may be additional tax considerations. In most cases, however, no additional taxes are due even for rental properties. It's important for your client to check with their CPA.How will this affect my client's credit?
This is difficult to say and varies widely based on your circumstances (how many months behind, your current rating, etc) and who you ask. General consensus is that a short sale reduces your credit rating by 75-150 points whereas a foreclosure decreases it between 150-250 points.How will I know what's going on?
Because it's common for the bank to take 2-4 months to make a decision, the wait can be a real challenge. We address this by communicating frequently with you, your client and the buyer's agent to keep everyone apprised of what's going. We typically will call the bank 2-3 times per week to keep things moving forward as quickly as possible and to catch any issues early.What should I do while we wait for the bank's approval?
The short answer is: do what you would normally do if listing a non-short sale property. Let us worry about the banks, you focus on finding and keeping the buyer, and closing the transaction once we get the acceptance letter.You also play a very important role with the BPO, which is the bank's appraisal. It is critical that you engage with the bank's BPO agent to make sure they agree with your assessment of the value of the property. We'll provide you with details about how to do this.
