Q. When is it too late to save my home from foreclosure?
A. We suggest that you list your home as soon as you realize that there is a problem. However, many times people come to us only a few weeks prior to the scheduled trustee’s sale (foreclosure date). If we can get an offer on the property as late as the day prior to the sale, we can usually get the sale stopped or postponed. If you wait until the last minute to list your house however, it may not be possible to stop a trustee’s sale.
Q. Why should a use a Realtor? Can’t I negotiate the short sale on my own?
A. Just as you would hire an experienced attorney to represent you in a legal matters, an experienced Realtor is vital in negotiating your short sale. Without your attorney, you are less likely to win your court case. When you are in contact with the bank, they usually have one goal in mind- collecting the money they are owed. This can make the homeowner feel very bullied and it can discourage you from completing the task. When the bank deals with the agent, they see that the agent is offering an alternative to foreclosure. An experienced agent knows how to communicate with the bank, and therefore can be more successful.
Q. How much will a short sale cost me?
A. The banks pay for the seller’s closing costs and commissions. It will usually end up not costing the homeowner anything. Said another way usualy there are no out of pocket expenses.
Q. What if I have more than one mortgage, can I still do a short sale?
A. Yes it can still be done. In most cases the lender on the first mortgage will require the lender on the second to release their lien. Sometimes they will make an offer to the second lien holder. We will negotiate the second mortgage, then work on the first. Usually we can successfully negotiate a short sale on both mortgages.
Q. Can I still do a short sale if I am filing bankruptcy?
A. A short sale is still an option, even in a bankruptcy. The bank knows that if the property is included in the bankruptcy they most likely will have to foreclose and my loose more money. In most cases- they are more willing to work if a bankruptcy is pending.
Q. How will a short sale affect my credit?
A. Most of the time the homeowner is behind in their payments, the late payments will show on your credit. Sometimes the bank will not report the short sale to the credit bureaus and when they do it will show as ‘paid in short’ or a ‘charge off.’ Both of those options are much better than a foreclosure.
Q. Can I get proceeds from the sale of the home?
A. The lenders are taking a big loss in allowing a short sale. They are paying for closing costs, commissions and receiving less than what is owed. The bank feels that any proceeds that would come back to the seller could help defer the costs of the short sale or that the short sale will not be necassary. Therefore, they will not allow the seller to receive any money back from the sale.
Q. How do I know when a short sale is necessary?
A. When you get behind in your payments and know that you cannot bring the loan current, and can no longer afford the monthly payment, or when you know that foreclosure is eminent then it is time to look into a short sale.
Q. How long does a short sale take?
A. The time frame varies on every transaction. Each bank has different policies and procedures some take longer than others. Generally it will take 30-45 days from the time the offer is received, until the short sale is approved. Homes with a first and second mortgage can take longer, because we have to negotiate with two separate banks.
Q. Will it help move things along more quickly if I call the bank also?
A. No it will not help, in fact it could hinder the process. The agent is making regular contact with the bank and keeping tabs on the transaction. The agent understands the process, and knows how to “play the game” . When the borrower contacts the bank, they can slow things down and sometimes even interfere with their chances of getting the short sale approved.
Q. If the bank does not approve the short sale, am I still obligated to proceed with the transaction[sell the home]?
A. The buyer’s offer will be made subject to lender approval of the short sale. Which means, if the bank does not approve the short sale, then you are not required to continue in the transaction.