I want to preserve my credit score… is a
short sale right for me?
Late payments on your mortgage have
already done serious damage to your
credit score. Under new
legislation, you may qualify to
purchase another home in 2 years if
you can successfully rebuild your
credit after a short sale.
If I pay mortgage insurance and default
on my loan, why wouldn't that cover the
deficiency amount?
The mortgage insurance is not there
for your protection, just the
mortgage lender’s if the house goes
to foreclosure.
Do I have to have my home “Approved” by
the lender prior to offering it for sale
as a short sale?
No. Technically speaking there is no
such thing as being ‘Short Sale
Approved’. We will notify your
mortgage company that we are
pursuing a short sale and document
our pricing strategy and marketing
activities. The actual approval
only happens when the bank accepts
an offer.
I just missed a payment and I know I
will miss more… how long does the
foreclosure process take and is there
time to do a short sale?
Foreclosures take approximately 60
days in Virginia because we have a
non-judicial process. Generally
speaking a well-priced short sale
being processed by a trained listing
agent will sell and close in 60 to
20 days and prevent the bank from
proceeding with a foreclosure.
Will I still have to pay property taxes
if I do a short sale?
Property taxes will always have to
be paid as part of any accepted
short sale. Whether it’s you or the
lender depends on their policies and
the specific agreement you reach
while negotiating the short sale.
I owe more than my home is worth and I
can’t make the payment, do I have to
somehow qualify for a short sale?
The simple answer is NO. If someone
can’t make their payment and they
are otherwise insolvent they qualify
for a short sale. Note: insolvent
simply means their total debts are
great than their assets. We prove
that to the bank by completing the
Hardship Letter and Financial
Statement.
Do I have to pay income taxes... I have
heard that I will get a 1099. Will the
loss the bank takes be treated as a
taxable gain to me... the seller... is
this true?
It WAS true, now it’s not. Consult
your Tax Attorney or Qualified
CPA*. Very recently the tax law was
modified and now most people who do
a short sale on their primary
residence will have no taxes due.
How do you, my listing agent get paid...
who pays you commission?
The bank will pay the commission
along with all the other usual
closing costs.
Do I have to miss a payment to do a
Short Sale?
Again, the short answer is No. Late
last year most major lenders started
accepting short sale offers from
sellers who have never missed a
payment.
I want to do a short sale and have a 2nd
mortgage, does this make me ineligible?
No. Both of your lenders will need
to be satisfied in some way to
complete the short sale. If your
first lender will be paid off by the
sale, then you just negotiate the
terms with the second lender. Most
short sales do involve 1st
and 2nd lien holders. It
is always much easier to negotiate
if both mortgages are with the same
lender.
