What is a Short Sale?
**JUST WHAT IS A SHORT SALE!!
A "Short Sale" or "negotiated settlement" or "short pay" occurs when a Lender agrees to accept less than the amount owed as a payoff on a loan. If the propertyis worth less than the amount owed on the loan, then even if the Lender forecloses and takesback the property, they know they are going to take a loss.
We can often convince them that theLender will "do better" if they take less than what is owed now, in cash, rather than waiting andtaking the property back by foreclosure and trying to sell it later.
EXAMPLE: If the unpaid balance of a loan is, say, $200,000 and today's market conditionsdictate that the property will only actually sell for $104,000: - under a SHORT SALE the lender might accept$84,000 as payment in full. THATS A DIFFERENCE OF $116,000 in SAVINGS to a potentialBUYER AND $116,000 less that the SELLER would have to come up with at closing.Many lenders will accept short sales or discounted payoffs, especially if it would make morefinancial sense to sell the property now rather than foreclose; However--NOT ALL SELLERS nor ALL PROPERTIES QUALIFY for a short sale. We need to look at all the facts to see if aproperty may qualify.
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** IS THIS LEGAL? Yes. We simply ask the lender to take less than what is owed. It's legal andis done hundreds of times a day in almost every state.
HOW LONG WILL IT TAKE? The short sale negotiation process is a lengthy one. It maytake several weeks or more likely several months to get an approval. Many Lenders have severallayers of bureaucracy, insurers, and investors that we will have to maneuver through in order toget a short sale approved. So, it is important to be patient during this long process.
**MY HOUSE IS GOING TO FORECOSURE, WILL I HAVE ENOUGH TIME?
Maybe,maybe not. Just starting a Short Sale will not automatically stop a foreclosure. However, many times we can convince a Lender to stop the foreclosure. So, while there are no guarantees, itdoesn't hurt to try.
** CAN I STAY IN THE HOUSE?
The key word in "Short Sale" is sale. The purpose of a ShortSale is to get the property sold. So, you will be moving. The sooner you move out the easier it isto show a home. We are very creative when it comes to selling houses, and our buyers want tolook at the houses as soon as they know we're working on the short sale.
**WHAT IS A RELEASE?
The Bank may tale back theproperty in exchange for less than the total amount of the note. A release will allow the propertyto be sold without paying off the obligations of the note if it is specifically negotiated. Advantages: This successful Short Sale will allow the property to besold thus avoiding a foreclosure on your credit record. Disadvantages: The remaining debt onthe property (also called a deficiency) could still exist, unless it made part of negotiations withYou would still be liable for the note - in other words, you still owe the money if it is the bank.if it is not not made part of the sale. Reality: Remember the old saying, "you can't get blood out of aturnip." It is not likely the Lender will pursue the deficiency unless you have other significantassets. Most importantly though, our negotiation team have a very high success rate of getting a deficiency waived!A Lender may agree to accept less than it is owned.
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** WHAT IS "SATISFACTION? "
Satisfaction is complete and total satisfaction of the note and releases its lien against the property. It issomething we always ask for, and frequently receive. Advantages: Your note and obligation tothe Lender are satisfied for less than you owe. When the property is sold, the debt is paid offcompletely. Disadvantages: You may have some tax consequences as the Lender may issue youa 1099 form, saying in effect that you are liable for taxes on between what we purchase theproperty for and what the balance on the loan was. However, IRS rules say that if your liabilitiesoutweigh your assets, you aren't liable for the amount owed. Also, due to the Mortgage DebtA Lender may offer a Deed In Lieu ofRelief Act of 2007, this IRS Tax Deficiency is usually not even an issue if it's a primaryresidence.
** WHAT IS A "DEED IN LIEU OF FORECLOSURE?
What this means is that you will Deed the property back to them instead of lettingit go to foreclosure. The problem with some Lenders is that they don't advise you that they areNOT accepting the Deed as full satisfaction. So after you Deed the property back to them, theygo after you for a Deficiency Judgment. If you have a second mortgage on the property and it isnot with the same Lender, there is no way that you can Deed the Property back to the FirstLender and they give you a full satisfaction. The reason is that the first lender received theproperty and the second lender received nothing. Should you Deed the property back to the firstlender the second lender WILL go after you because of the promissory note you signed whenyou purchased the property. You may also be liable to the IRS for this as a Tax Deficiency,
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We Are The SHORT SALE EXPERTS.
We Are The PROVEN SUCCESSFUL SHORT SALE SPECIALISTS.
** WE WORK WITH SELLERS AND BANKS
TO LIQUIDATE PROPERTIES * *
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God Bless.
Registered Agent South Carolina Homes, Inc. Charleston, SC
Charleston, SC:
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