- I owe more than my home is worth and I can’t make the payment. How do I know if I qualify for a short sale?
If you can’t make your payment and your total debts are greater than your assets you may qualify for a short sale. However if you have other assets to cover the mortgage, you might not fit their requirements. Your mortgage lender will make a final decision after receiving our Short Sale package.
- How did so many homeowners get into this situation?
There are many reasons that seller right now may have no equity in their homes. (Equity is what you have left after you pay off all mortgages and other selling expenses.)
- Many people have lost their hobs in our current economic crises.
- Some Buyers obtained 100% financing, and the market declined.
- Others have adjustable mortgages set initially for a "teaser" rate. They were not prepared for the higher payment after an adjustment took place.
- Others may have made risky decisions and simply bought too much house.
- Some borrowers may have gotten poor advice from family and friends, as well as industry "professionals".
- Others might have been victims of Mortgage Fraud.
- I can’t make my house payments but I may have an ability to pay back all or part of the difference. Is a short sale right for me?
Start by talking to your lender. In cases where you can pay back all or part of the shortfall after the sale it makes sense for them to work out a repayment plan. If you qualify, the lender will then release the lien and allow the home to close.
- Will a short sale affect my credit score?
Yes, since it shows that you were unable to pay a mortgage according to the agreement you signed. It might take around 3 years to re-establish good credit. It will generally have far less negative effect on your credit than a foreclosure or a bankruptcy, which are last-resort measures if you cannot do a short sale.
- If I pay mortgage insurance and default on my loan, why wouldn't that cover the deficiency amount?
The mortgage insurance protects the lender, not you the borrower.
- Do I have to have my short sale approved by the lender prior to offering it for sale as a short sale? I called them and they wouldn’t talk to me about it.
The approval process does not begin until after there is an offer. There are steps that I can help you take right now to speed up the process. I know how to approach the lender and what they need to make it happen.
- I just missed a payment and I know I will miss more. Is there time to do a short sale so that I can avoid foreclosure?
The foreclosure process can take up to a year. Generally speaking, a well priced short sale h by an educated short sale listing agent will sell and close in around 4 months provided the seller and lender cooperate.
- Will I still have to pay property taxes if I do a short sale?
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 you reach while negotiating the short sale.
- My home needs repairs and upgrading. Am I expected to take care of these items out-of-pocket before selling?
Short Sales are “As-Is” sales. In exchange for a low price, buyers will be asked to perform their own repairs after the purchase, and may also be expected to cover the cost of termite inspections, surveys, and association documents to name a few, which would otherwise be paid for by the seller. Bottom line: don’t spend your scarce funds, but any clean up and organization you can do to make your property look better will help get the home sold quickly and at a price the lender is more likely to accept.
- Do I have to pay income taxes as a result of the short sale? I have heard that I will get a 1099 form from the mortgage company and might be treated as a taxable gain to me, the seller. Is this true?
This was once true. Very recently the tax law was modified and this may no longer be the case for some people. Always consult your Tax Attorney, CPA, or EA.
- How do you, my listing agent get paid - who pays the real estate commission?
When a short sale is approved, your mortgage lender will add the real estate commissions along with all the other usual closing costs to the amount they will have to pay in order to allow the sale to close.
- Do I have to miss a payment to do a Short Sale?
No. Late in2008 most major lenders started accepting short sale offers from sellers who have never missed a payment if they see a future hardship.
- I want to do a short sale and have a 2nd mortgage, does this make me ineligible?
No. Both of your lenders will need to be satisfied in some way to complete the short sale. After your first lender is paid off or settled by the sale, then payment terms with the second lender must be handled. Many short sales do involve 1st and 2nd mortgage holders.
- As a buyer, are short sales a good way for me to get a below market price for a home?
Short sales offer good values for buyers who are willing to wait! Make sure your expectations are realistic. It is nearly impossible to close in the usual 30 – 60 days so. Also, remember that your purchase must be approved by the lender, and they will not agree to performing repairs or paying for some of the closing costs that sellers pay in a typical home sale. Make sure you are using an experienced Buyers Agent who understands the short sale process.
- Why are Adrienne Lally and RE/MAX Honolulu the best choice to help me?
If there is a way for you to keep your home, and you want to, I always recommend exploring that first. But if you really need to sell, I will work tirelessly to help you through these difficult times. As a full-time Hawaii Realtor since 1986, I have helped many homeowners make tough decisions. Your goal will be my focus, and I take a personal interest in giving you the best available information. When you need outside help, I will refer you to others such as tax and legal professionals, so that you know you are doing the right thing.
This information is not a substitute for legal advice, and some of this information may not apply to you. Always obtain the opinion of a qualified attorney, tax professional, and financial planner before taking any action relating to a short sale or foreclosure. These opinions are based on reliable information but are not guaranteed.
No comments:
Post a Comment