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Short Sales

Domain Realty and its agents are specialists in the marketing and negotiation of short sales. All though short sales have been done for years you may not have heard of them until recently. The current real estate market conditions have created an environment where many homeowners are stuck in homes that have lower market values than what they owe on their mortgage(s). Homeowners in this position that cannot afford to pay down their mortgages balance often cannot refinance for a competitive interest rate or sell their property to pay off the debt in full. There are some federal programs out there to help borrowers (see for details). If you have explored other options and they do not work for you or you do not qualify, a short sale may be your best option. To contact one of our agents and see if a Short Sale would work for you call us at 773-235-9142 or send us an e-mail by clicking here.

The following is a useful Q & A of our most frequently asked questions regarding short sales:

What is a short sale?

A short sale is a sale of real estate where you negotiate with your mortgage lender(s) to accept less than what is owed on your mortgage(s) to allow the sale of your property at a lower price.


What will I have to pay for in a short sale?

All the traditional costs of a real estate transaction including taxes, title fees and Realtor Commission come out of the sale proceeds with the balance going to your mortgage lender(s). In some cases, the mortgage lender(s) may ask for a cash contribution from the seller/borrower (you) to increase their net proceeds. Keep in mind that this is negotiable and the majority of our sellers do not have to make a contribution.


Can I make money off the short sale?

Unfortunately since the mortgage lender(s) are agreeing to take a discounted payoff they will not usually allow the borrower to profit from the sale. Some mortgage lenders however have started to pay a cash incentive to borrowers that short sale their properties. This is only a small number of mortgages with a small number of mortgage lenders. See your agent for details.


How will a short sale affect my credit? 

If you are not paying your mortgage payment, you will continue to get late payments on your credit report until A) you pay off your mortgage or B) the bank completes the foreclosure. At the end of a foreclosure a judgment is entered on your credit report that can remain on there for 7 years. If a successful short sale is completed before this judgment, you will only have the late payments and that the debt was settled on your credit report which may have less of an impact on your credit sore.


Once I close the short sale of my home, will I still owe the bank anything? 

It is important that all mortgage lender(s) agree to waive any deficiency against you as part of their agreement to accept a short sale. This means that they must agree to forgive the difference between your mortgage balance(s) and what you sold your property for.


Can I do a short sale if I am still current on my mortgage payments? 

It is possible to do a short sale without missing a payment but many lenders will not even consider a short sale unless you are already behind on your payments.


How long will a short sale take? 

Start to finish a short sale can take quite some time to complete. Banks have ramped up on staff and systems to handle the higher volume of short sale transactions. Every lender is different but in general, a short sale can take anywhere from a few months to a year.


What will I need to do for a successful short sale? 

Your mortgage lender will want to collect some personal documents from as part of the short sale process. These documents will include their short sale application, bank statements, pay stubs, tax returns and other documents. They also ask for a Hardship Letter from you to explain the circumstances that led to needing to short sale your property. All these documents are collected to confirm that there is a hardship and that a short sale is appropriate.


What are the tax implications to a short sale? 

In some cases, your mortgage lender can claim your forgiven debt as income to you that may impact your liability on your income tax return. There are different tax laws and variables that can affect this so we recommend you contact a competent tax accountant to fully explain these implications if any.

To contact one of our agents and see if a Short Sale would work for you call us at 773-235-9142 or send us an e-mail by clicking here.