Frequently Asked Questions on Short Sales. 1-718-927-3500

Frequently Asked Questions on Short Sales and Pre-foreclosures:

Can a home seller sell a home for less than its mortgage?

How does a home go into foreclosure?

How does someone sell a slow mover?

How long do bankruptcies and foreclosures stay on a credit report?

When does foreclosure begin?

How can I find out if you can help me with my short sale?

I have a listing agreement with a Realtor who isn't getting the job done, what can I do?

What type of situation is the short sale best for?

How does a homeowner benefit from a short sale?

Still have unanswered Questions? Please send us your questions and we will get you the answers. Just fill out our Feedback Form with your questions.

1. Can a home seller sell a home for less than its mortgage?

Yes, in some case you can sell your home for less than what you still owe on the mortgage. But it is complicated and depends on the lender. This situation is known as a "short sale." Sometimes a lender will be willing to split the difference between the sale price and loan amount, which still must be paid.

A short sale may be more complicated if the loan has been sold to the secondary market because then the lender will have to get permission from Freddie Mac, the two major secondary-market players.

If the loan was a low down payment mortgage with private mortgage insurance, then the lender also must involve the mortgage insurance company that insured the low-down loan.

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2. How does a home go into foreclosure?

Foreclosure proceedings usually begin after a borrower has skipped three mortgage payments. The lender will record a notice of default against the property. Unless the debt is satisfied, the lender will foreclose on the mortgage and proceed to set up a trustee sale.

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3. How does someone sell a slow mover?

Even in a down market, real estate experts say that price and condition are the two most important factors in selling a home.

If you are selling in a slow market, your first step would be to lower your price. Also, go through the house and see if there are cosmetic defects that you missed and can be repaired.

Secondly, you need to make sure that the home is getting the exposure it deserves through open houses, broker open houses, advertising, good signage, and listings on the local multiple listing service (MLS) and on the Internet.

Another option is to pull your house off the market and wait for the market to improve.

Finally, if you who have no equity in the house, and are forced to sell because of a divorce or financial considerations, you could discuss a short sale or a deed-in-lieu-of- foreclosure with your lender.

A short sale is when the seller finds a buyer for a price that is below the mortgage amount and negotiates the difference with the lender.

In a deed-in-lieu-of-foreclosure situation, the lender agrees to take the house back without instituting foreclosure proceedings. The latter are radical options. Your simplest, and in many cases most effective, option is to lower the price.

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4. How long do bankruptcies and foreclosures stay on a credit report?

Bankruptcies and foreclosures can remain on a credit report for seven to 10 years.

Some lenders will consider an borrower earlier if they have reestablished good credit. The circumstances surrounding the bankruptcy can also influence a lender's decision. For example, if you went through a bankruptcy because your employer had financial difficulties, a lender may be more sympathetic. If, however, you went through bankruptcy because you overextended personal credit lines and lived beyond your means, the lender probably will be less inclined to be flexible.

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5. When does foreclosure begin?

Lenders will initiate foreclosure proceedings when homeowners become delinquent in their mortgage obligations, usually after three payments are missed. The lender will then notify the buyer in writing that he or she is in default. The lender can request a trustee's sale or a judicial foreclosure, in which the property is sold at public auction.

A borrower can cure the default by paying the overdue amount and the pending payment after the notice of default is recorded, usually no later than a few days before the property's sale.

Some sales allow the successful bidder to take possession immediately. If the former owner refuses to vacate the premises, the court can issue an unlawful detainer that allows the sheriff to come out and evict them.

Borrowers should do everything they can to avoid foreclosure, which is one of the most damaging events that can occur in an individual's credit history.

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6. How can I find out if you can help me with my short sale?

It is very simple. Just fill out our no obligation evaluation form providing as much information as possible and we will contact you to let you know our opinion.

If for some reason we cannot handle your short sale, we also have a large network of other investors to whom we can refer your case. They are all experienced in short sales and we also work as advisors to them to assist them in negotiating short sales. So if your home is a candidate for a short sale, chances are we can help you no matter where you are located.

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7. I have a listing agreement with a Realtor who isn't getting the job done, what can I do?

If the job is not getting done and you can't be patient and wait, you need to simply CANCEL YOUR LISTING AGREEMENT in writing and look for an investor like us to work with. Most listing agreements can be canceled upon notice from the homeowner. in shortsalenyc is such an investor who can walk you through your short sale and buy your home quickly.

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8. What type of situation is the short sale best for?

Most short sales are done on properties in foreclosure. This means the homeowner is at least 3 payments behind and the foreclosure suit has been filed by one of the mortgage lenders. Recently, more mortgages that are simply behind or "in default" are considered short sale candidates without actually being in foreclosure.

Also, the homeowner typically has negative equity or no equity in the home. In other words, the total balance owed on the mortgages is equal or greater than the price at which the house can be sold. This situation is growing increasingly common due to the easy availability of 100% mortgages (no money down) as well as the recent decline in prices.

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9. How does a homeowner benefit from a short sale?

First and foremost, it relieves the stress of being in foreclosure and being hounded by the mortgage lender; and it allows homeowners to get rid of their big mortgage payment and move on with their lives. A short sale allows you to stop the foreclosure and get a fresh start. In my experience, this is the primary benefit to homeowners. They are tremendously thankful to just relieve the burden that their home and mortgage have become.

A short sale also prevents additional damage to your credit. Having some late payments and a foreclosure filed has already done damage to your credit. However, a completed foreclosure will do much more damage and lower your credit score tremendously. Obviously, if you have to declare bankruptcy, that is a huge black mark on your credit. A short sale results in the mortgage actually being paid off, which reflects positively compared to a foreclosure.

Also, it is important to note that the short sale does not cost the homeowner any money. He can remove his burden for free.

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Still have unanswered Questions? Please send us your questions and we will get you the answers. Just fill out our Feedback Form with your questions.