Short Sale Questions- Answered

Short Sale FAQs

What is a Short Sale?
A short sale is a forgiveness program that allows a borrower to sell their "underwater" property when the borrower can prove that they can no longer afford to make their mortgage payments.  This means that financial institution that you have a mortgage with is willing to sell your property for less than you owe on it due to the significant decline in property value and economic hardship.  Upon final approval from the financial institution, a short sale can help homeowners avoid further collection activity and/or foreclosure action, which can result in severe adverse credit reporting.

Here is an example of a short sale: 

John the homeowner has taken out a $200,000 mortgage for his home and has been paying his $1,000 a month mortgage.  However, the value of his property has fallen to $120,000 and his employment status has been reduced to part-time.  Therefore, John can no longer afford to his $1,000 payments.  He calls Scarlett and Craig to help him do a short sale.  Scarlett and Craig sell his home and the financial institution agrees to accept the proceeds from the sale to settle his mortgage, even though the financial institution will be taking a significant loss.

Why use a Realtor for the short sale process?
If you are a SELLER:  If you need to get out of your property through a short sale, a qualified Realtor with Short Sale experience is the best way to go.  All a seller needs to do is provide the listing agent with the paperwork in regards to their financial situation and sign a letter allowing the agent to speak with their financial institution.  This can be a very scary time for a seller, especially since they do not know the ins and outs of the short sale process.  A qualified Realtor will walk you through the entire process and do most of the work for you.  With a Realtor, the seller does not pay the real-estate fee, have to worry about showing their property and is helped out of a possible foreclosure situation.  You would be risking your future as well as your family's future for no good reason if you choose not to use a Realtor with Short Sale experience like Scarlett and Craig when trying to short sale your property.

If you are a BUYER:  As a buyer of short sale properties, the most important reason to use a Realtor with short sale experience is that they can qualify the short sale for you.  In a market that is flooded with available properties, a Realtor will save you time and frustration by helping you find the exact properties that you are looking for and walking you through the entire lengthy short sale process.  If that were not enough, their service is completely FREE to you. 

How long does it take to get a Short Sale approved?

Unfortunately, there is no set timeframe for a financial institution to respond to a short sale.   Scarlett and Craig have experienced a short sale process taking anywhere from 6 weeks to 6 months and sometimes even longer.  However, if pressed for a timeframe, they would say that a short sale would take approximately 3 months on average if done properly.

How do I qualify for a Short Sale?

To qualify for a short sale, you must owe more on your home than your home is worth.  This means that your mortgage amount must be greater than the value of your property.  In addition, you must be able to prove to your financial institution where your mortgage is held that you cannot afford your mortgage payments, have no significant assets and have no way to pay off your loan.   

What will the financial institution ask for in order to qualify?

Your financial institution will require many documents to prove that you cannot afford your home anymore.  Generally, they will request some or all of the following:  last 2 months of your bank statements, a financial worksheet, last 2 years tax returns, a hardship letter and your W-2.

Scarlett and Craig have been successful in helping their clients get out of a home that they can no longer afford.  In doing so, they have developed a proven system that works and have relationships with numerous financial institutions, which will ultimately help sell your property as quickly as possible.  To get the process started,

Call Scarlett and Craig now! (561) 758-3374