Short Sales are when a lender or lenders accept the sale of a property that nets less than the payoff amount. The main three things an owner has to show is a hardship, behind in payments and a monthly P & L showing all your bills are more than what you make. A few common hardships are health, lose of job or income, relocation due to job or family illness. Naturally there can be other hardships, and they are each weighed individually. Any home that cannot go through a judicial foreclosure is a great candidate for a short sale. I had one of these in the Above The Four Seasons Hotel condos. It’s not at all easy to get the bank to except short sales. Do not just stop paying your monthly payments thinking you can get a short sale approved. Banks will first try to do loan mortifications before they will open a short sale file for consideration.
I’m a Loss Mitigation Certified Agent! I’ve been involved with shorts sales for over 2 years and it’s a very fast changing business day to day. It’s not for the average agent and it’s not for buyers that have to close by a certain date. Some banks are much faster than others in accepting or countering short sale offers. I currently have one that’s been before the bank since April 24th and seems to be in nowhere land. Recently another was countered in seven days. Naturally all short sale sellers are expecting the bank to forgive the balance, but banks do have the right to ask for a promissory note for any short fall. You will also receive a 1099 tax form on the short fall as income. It is possible to get the 1099 waived with the right circumstances.
In the last few weeks things have really changed and I foresee short sales becoming a bit hard to get approval. FHA has new guide lines that will limit shorts sales for that type of mortgage. Fannie Mae the largest mortgage holder released guidelines in the last few weeks that will also change things.
If you want to know more about short sales please contact me. I’m a qualified agent and that can answer your questions and pre-qualify you for a short sale. I want to warn you there are agents leading people down the wrong path. Keep in mind you have to have a documented hardship to even get past go!!
