Frequently Asked Questions
1. Is it my best option? Only if you have been denied a loan modification and must move.
2. Does everyone qualify for a short sale? No. The Lenders have guidelines such as debt to income ratios, date of loan origination, occupancy, etc. that they consider in order to approve you for a short sale.
3. Am I responsible for paying back the deficiency? Potentially, however, when we handle your sale, we make sure the approval letter states the deficiency is waived.
4. Will my lender send me a 1099? Even if you sell for less than what you owe, you could be responsible for any gain if you sell your property for more than what you bought it for originally. There is currently proposed legislation that may consider the loss to the lender a gain for you. We recommend you speak to your accountant prior to selling your property.
5. Will I have to consider bankruptcy? It is less likely with a short sale than a foreclosure because of the above waiver, however, with a foreclosure, the lender can pursue a deficiency judgement.
6. What is a deed in lieu? This is when you sign the deed over to the lender instead of going through a foreclosure. Most lenders require that you try a short sale before exercising this option.
7. How will it affect my credit? The reality is you loose points on your credit. The short sale show up like a settlement for less than what was owed.
8. Short Sale vs. Foreclosure? This is answered above.
9. When can I buy another home? FHA guidelines currently states that if you go into a short sale with good credit, it's 2 years. If you go into it with bad credit (as most do) it is 3 years with reestablished credit.
10. What does it cost me to do a short sale? Nothing. The brokers fee, transfer tax and most recording fees are negotiated from the Lenders side of the transaction. You just need to maintain your utilities while going through the short sale process.
Email us today or call 508-822-0500 for a free, no obligation consultation to see if a short sale is right for you. We appreciate the opportunity!