Darrell Wilde
Real Estate Consultant

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SHORT SALE FAQs

Failed Loan Modification?

Behind in payments? A shortsale may be a solution.

What is a short sale?

A short sale is when the net proceeds from the sale of a home are not enough to cover the seller's mortgage(s) obligations and closing costs. This type of sale is sometimes called a "short-equity" transaction because the seller has negative equity in the home. Because the seller's lender(s) is taking a loss on the loan, the lender(s) need to approve the terms of the sale. This process allows the seller to avoid a foreclosure which can remain on the sellers credit report for 7-10 years.

Do I Qualify for A Short Sale?

The qualifications for a short sale include any or all of the following:

(A) Unemployment (E) Military Service

(B) Bankruptcy (F) Job/Significant income loss

(D) Business failure (H) Death in Family

Why Would A Lender Accept A Short sale?

While most lenders would not be jumping for joy @ the prospect of a short sale, they are aware that a foreclosure is usually a far more time consuming and costly option. In fact, banks are quickly realizing that it costs them thousands of dollars more to go all the way to foreclosure.

What Paperwork will I need to provide my lender?

All lenders require the following documents in order to approve a short sale commonly called "Short sale package"

The lender needs many documents from the seller in order to approve a short sale. The documents,altogether, are called a "short sale package'. Here's ours;

. Fax Cover Sheet . Pre-Qualification/Proof of funds

. Authorization form . Estimated Settlement statement

. Financial Statement . 2 Months Bank Statements

. Hardship letter . 2 Months pay stubs

. Listing agreement . 2 Years tax returns

. Purchase agreement . Repair Estimates

Once received, we will put everything together as a package and submit it to your lender(s) for immediate approval.

What Are The Benefits of a Short Sale?

For homeowners facing foreclosure, short sales are a beneficial solution. A short sale will relieve you of the responsibility over the property with a lot less credit damage than a foreclosure. You will not be hard pressed by any upfront costs with a short sale. All fees, including closing costs, borker commissions and escrow fees are covered by your lender.

If I Do A Short sale, How Much Will I Have To Pay To Sell My Home?

In most cases you will pay literally no sales cost if your lender approves the short sale. But if you, for example, own a condo or townhouse with a homeowner's association (HOA) lender's in the state of California frequently do not allow any of the proceeds from the short sale to be paid to the HOA. Even if the seller has stopped making payments on his/her home and is participating in a short sale, he/she should continue to pay HOA if they reside in a community with an HOA if they can afford to do so. The HOA balance needs to be paid in order to complete the short sale.

Will I Get Any Money Back From a Short Sale?

Some lenders are now offering distressed home owners a cash incentive in order to cooperate with a short-sale, instead of allowing the property to be foreclosed on. Some qualified home owners can get $3,000.00 or more back from a short sale to use towards relocation expenses. Which banks and amounts of cash offered is on a case by case basis.

I Am Concerned About My Credit. How Will A Short Sale Affect My Credit?

The big key here is to avoid foreclosure. By nearly any measure, a forclosure is the most damaging event your credit status can encounter-worse than a bankruptcy. In the course of getting your short sale negotiated and approved you may miss your mortgage payments and these will show on your credit. By avoiding foreclosure, you will likely be able to resume normal borrowing ( car loans, credit cards, consumer goods and such) relatively quickly.

I Have More Questions. Who do I Ask?

If you have further questions, or feel you may qualify for a short sale, please contact me for a complimentary consultation.You may E-Mail me @ DarrellWilde7@aol.com or call me @ 562- 691-8497 direct.

Legal disclaimer: We are not attorneys or tax consultants and are not qualified to give legal advise. Please seek the advice of an attorney or your tax consultant.

Darrell WildeReal Estate Consultant

Darrell Wilde
Real Estate Consultant