If you are facing foreclosure and can no longer afford your home, you many qualify for a Short Sale - even if you don't think you can (or haven't been able to) sell your home.
What is a short sale?
A short sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a short sale, you can sell your home and pay off all (or a portion) of your mortgage balance with the proceeds. Depending on your situation, you may be required to make a financial contribution to receive a short sale. A short sale is an alternative to foreclosure and may be an option if:
- You are ineligible to refinance or modify your mortgage
- You are facing a long-term hardship
- You are behind on your mortgage payments
- You owe more on your home than its worth
- You have not been able to sell your home at a price that covers what you owe on your mortgage
- You can no longer afford your home and are ready or need to leave
What are the benefits of a short sale?
- Eliminate or reduce your mortgage debt
- Avoid the negative impact of foreclosure
- May be eligible for up to $10,000 in relocation assistance, in some cases
- Start repairing your credit sooner than if you went through a foreclosure
- You may be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure
What is the process for a short sale?
If you qualify for a short sale option, the process is similar to a normal real estate transaction. You will work with a real estate agent to market and sell your home. However, your mortgage company will also be working with you and your real estate agent every step of the way to:
- Set the sale price (based on current market value)
- Collect financial information and negotiate with other lien holders (i.e., your second mortgage company), if applicable
- Review acceptable offers
- Agree to the terms of the sale once a buyer is in place
- Work with the buyer's real estate agent and mortgage lender to finalize the sale
A short sale may take up to 120 days, but could take longer or shorter depending upon your specific situation. If you are unable to sell your home, you may be able to transfer the ownership of your property to the owner of your mortgage, also called a Mortgage Release or Deed-in-Lieu of Foreclosure.
How We Can Help
There are 3 main factors to consider when hiring an agent to assist you with a short sale:
- Factor #1 - Experience in Handling Short Sales
- Factor #2 - Experience with a Short Sale Banks
- Factor #3 - Experience Selling Homes in Your Area
Factor #1 - Handling Short Sales
Experience in handing short sales means one thing: experience in closing short sales. The Team USA has multiple agents trained and practiced in the short sale process - our team has been been managing short sales processes for over 10 years; and our portfolio contains hundreds of successful short sale negotiations and closings.
All real estate transactions, including short sales, come with contracts, contingencies, deadlines and negotiations - don't be fooled by sites that claim to be short sale experts, but NOT real estate agents. Our team of real estate professionals will offer an honest and ethical approach that will achieve optimal outcomes for your situation. We will guide you through the process offering personal service and unbiased advice to get you through the short sale process.
Factor #2 - Working with Short Sale Banks
The most competent short sale agents have experience negotiating with major short sale banks. The short sale bank, ultimately, has the final say in the approval process. Our experienced real estate team is versed in the banks policies and procedures; and are familiar with the forms needed to facilitate a successful short sale offer. Our team has worked with the top short sale institutions, such as:
- Bank of America
- One Main Financial
- JP Morgan Chase
- Wells Fargo
Our experience doesn't stop there, we have worked with numerous smaller banking institutions, too. Over the years we have gained great insight into the short sale market, and can proudly say we are very successful in alleviating the burden of the short sale process for our clients. Of course, not all short sale offers are accepted the first time around, but with our experience and determination we WILL get the job done for you.
Factor #3 - Success in Selling Homes in Your Area
We are a local, awarding winning real estate team celebrating 18 of years living and working in the Northern Virginia area. With over 1000 sales under our belts we know the local markets and will guide you to price the short sale correctly.
We know the short sale process, how to head off potential problems and negotiate with the bank. We also know how to market your home to potential buyers and how to keep them interested while waiting on the short sale bank approval. Most importantly, we are here for YOU throughout the entire process.
*Your information will never be shared with any third party.
Frequently Asked Questions
- What is A Short Sale?
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. Lenders only agree to short sales if they receive a full and complete package meeting the specific guidelines of that particular lender.
- How Do I Know If it is My Best Option?
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.
- Do You Offer Loan Modification Services?
We do not offer any type of loan modification services. You should speak with your lender directly if you are interested in a loan modification, and never a third party company.
- Is a Short Sale Better than Foreclosure?
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. 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.
- Will I Have to Move Out Immediately If the Lender Agrees to the Short Sale?
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.
- What Types of Real Estate can I Short Sell?
Any type of real estate can be short sold. You can short sell your primary residence, a second home or an investment property.
- How Does a Short Sale Affect My Credit? How Long Does a Short Sale Last on My Credit?
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 late payments on your credit. As a result, the repairing of the credit should start immediately.
Can I Short Sell if my Payments are Current? Yes
Can I Short Sell if I Missed or am Behind on My Payments? Yes
Can I Short Sell if I have Already Received, Applied or Denied a Loan Modification from my Lender? Yes
Can I Short Sell if I Already Received a Foreclosure Notice?
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
How soon can I get started?
Immediately!! The sooner we get the process started the sooner you can help you get a fresh start. We are here to help - contact us TODAY.