Short Sales: Frequently Asked Questions
What is a Short Sale? Can It Help You, the Seller?
Yes, a short sale is the sale of real estate in which the lender allows the proceeds to fall short of what the owner still owes on the mortgage.
Banks and mortgage companies are not in the business of owning real estate through foreclosure. They stand to lose more money by foreclosing on your property than selling it at a loss without taking over possession. A short sale is usually a more economical action for a bank. If a property goes to foreclosure, the bank is now responsible for attorney fees, realtor commission, property maintenance, property repair, insurance, utilities, and the threat of vandalism during vacancy. These are headaches to the bank. They are in the business of making loans; not property management. If it is in their best financial interest they will sell a property short.
I understand that defaulting on your mortgage is a difficult situation, and a recent national epidemic. You are not alone! In fact, many people are heading into default, or are already in foreclosure. What many people don't realize is that they have an option. A short sale is an alternative to foreclosure.
How do I know if a Short Sale is right for me?
If you are faced with a financial hardship and are having difficulty paying your monthly bills a short sale may be a good option. Typical circumstances that lead toward a hardship include unemployment, divorce, separation, mounting medical bills, business failure, inability to work, death of a spouse, or an increase in your adjustable mortgage payment. If you owe more on your property than it is actually worth, including payment of real estate taxes, agent commissions, closing costs, late payments, interest, insurance, monthly assessments / association dues, and do not have assets to cover the expected remaining balance of your mortgage after the sale of the property and associated costs, then a short sale is an option.
Why begin a Short Sale?
A short sale is a wise alternative to foreclosure. Conducting a short sale minimizes damage to your credit. Having a Foreclosure on your credit can be worse than bankruptcy. Foreclosures may stay on your credit for up to seven years and can make it difficult to obtain another mortgage and various other types of secured (home and auto) and unsecured ( credit cards and student) loans.
A short sale can also help to restore your credit (no more late payments) and get relief from potential future legal actions, mortgage debt, and deficiency judgments. You may also qualify to obtain up to $1,500 in governmental aid!
How Can I Help?
Education and Experience: Not every real estate agent is properly trained in short sales, and many agents do not want to work with a seller or buyer in a short sale situation. As an Accredited Distressed Property Representative (ADPR), I have training (accredited by the Chicago Board of Realtors) and experience in short sales. I also have the time and desire to help those that are interested in buying or selling via a short sale. Short sales are time, labor and detail intensive. The last thing you need is an unqualified or inexperienced agent to potentially make your situation worse or give you false hope.
Information, Negotiations and Coordination: I will assist you in gathering, organizing and analyzing your financial information to support your hardship claim. I will then prepare and present your application in an organized, factual, and professional manner. Finally I will manage the matrix of cross-functional teams needed to complete your transaction: title companies, attorneys, other real estate brokers / agents, all lien holders and interested parties.
Is There Enough Time?
It's best to allow yourself as much time as possible to go through the process. Every situation is different and the sooner you seek representation by an agent the sooner your situation can be evaluated.
Still have Questions?
If you have any questions or concerns about Short Sales, or are ready to start the short sale process please feel free to reach out for more information. I can be reached at 312-315-4544 or [email protected].
Hope this is helpful!