OREGON SHORT SALE EXPERT
Why do you need to Short Sale? We are here to answer these and many other questions you may have about when, why, and how a short sale can be beneficial.
Q: Should I short sale?
A: Are you may be in a situation where there is no equity left in your home, there is no way for you to make your montly payments, and the market conditions will not allow you to sell you home for what you need? We are here for you and short-selling is definitely an option for you.
Q: Is my bank working with me or have options for me?
A: Many banks try to strong arm home owners by not being flexible with payment options. If this is your bank, then "No", your bank is not working with you. If your bank is keeping lines of communication open with you and working with you regarding pay back options that are reasonable, then "Yes" your bank is working with you. Our short sale experts can also help with this process to ask questions that you may not know to ask which might open up even more options.
Q: Where do I start?
A: You have already started and you may not be aware. By coming to this site, you are seeking a professional resource that can help. Email us at info@oregonshortsaleexpert.com and we would love to direct you in a more beneficial direction. We are here to help you and guide you through this process.
Q: I can’t make my house payments but I do have an ability to pay back all or part of the negative equity. Also, I want to preserve my credit score…is a short sale right for me?
A. Probably, not. In cases where the seller can pay back all or part of the negative equity (usually to the 2nd lien holder) it makes sense for them to work out a repayment plan. The lender will then release the lien and allow the home to close.
Q. If I pay mortgage insurance and default on my loan, why wouldn't that cover the deficiency amount?
A. The mortgage insurance is not there for your protection, just the mortgage lender’s.
Q. Do I have to have my home ‘Approved’ by the lender prior to offering it for sale as a short sale?
A. No. Technically speaking there is no such thing as being ‘Short Sale Approved’. The actual approval only happens with an accepted offer.
Q. 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?
A. The foreclosure process takes differing times depending on your state. In the Midwest a foreclosure can take over a year. In Oregon its taking 6+ months. Generally speaking a well priced short sale being processed by an educated short sale listing agent will sell and close in less than 120 days.
Q. Will I still have to pay property taxes if I do a short sale?
A. 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 reached while negotiating the short sale.
Q. 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?
A. 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.
Q. 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?
A. It WAS true, now it may not be. Consult your Tax Attorney or Qualified CPA. Very recently the tax law was modified and now most people who do a short sale will have no taxes due if it is a principle residence.
Q. How do you, my listing agent get paid? Who pays your commission?
A. The bank will usually pay the commission along with all the other usual closing costs.
Q. Do I have to miss a payment to do a Short Sale?
A. No. Late last year most major lenders started accepting short sale offers from sellers who have never missed a payment.
Q. I want to do a short sale and have a 2nd mortgage, does this make me ineligible?
A. 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 holder.
Q. What happens to the seller’s credit rating when they allow an investor to short sell their property?
A. What typically happens is the loan will show up as "paid" on their credit report; however there will be a notation that says "settled for less than originally owed" or something along these lines. It is more favorable for a homeowner to short sell than to have a foreclosure on their credit report.
Q. Can an owner profit from a Short Sale?
A. The seller cannot profit (monetarily) from a pre-foreclosure short sale. But there are always exceptions to the rule.
Q. How do bankruptcies affect the possibility of doing a short sale?
A. Most mortgagees won’t consider a short sale if the homeowner is in bankruptcy...why? Because negotiating a short sale payoff is considered a collection activity. Collection activities are prohibited in bankruptcy.
Q. Can somebody tell me what documents do I have to include in a Short Sale package?
A. Documents depend on the lender. Each lender has different requirements. It is typical to require hardship letter, purchase and sales contract, ECOR, settlement statement (HUD 1), net sheet, pay stubs, bank statements,personal financial sheet (monthly budget), amongst other things. We have assembled a package with many of these documents.
Q. What percentage of mortgage companies send someone out for an appraisal on a possible short sale?
A. All lenders order a BPO or full appraisal of the property before making their decision to accept or reject the short sale offer. This is there only way of assessing the value of the property.
Q. How late in the pre-foreclosure process can you start a short sale?
A. Try to allow a window of at least 90 days to effectuate a mortgagee approved, pre-foreclosure short sale. The sooner the better.
Q. Why might your lender ignore a Short Sale Package that when received?
A. Incomplete packages are set aside. For example if someone doesn't include a HUD-1 Settlement Statement that package is set aside. The Borrower must supply financial information, tax returns, hardship letter and more. This is why it we will not submit a short sale package until your file is fully complete.