What is a short sale?
A short sale is when your bank agrees to accept less then what you owe them on your mortgage. Your bank will accept whatever the current market value is for your home so that you can sell your home and move on with your life.
How much does a short sale cost me?
Nothing. The bank pays for all costs associated with the short sale.
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What is considered a hardship?
Depends on the bank but hardships include decrease of income, loss of job, health conditions, divorce, bankruptcy, death, job relocation, retirement, excessive debt, failure of modification, imminent default, facing foreclosure, can’t afford mortgage, etc. Our experience is that most people qualify for a short sale.
How does the short sale effect my credit?
Effect on credit scores will vary depending on the individuals overall credit and will largely hinge on if they are current while completing the short sale. We have had people that stay current on their mortgage payments and have little to no effect to their credit score.
Does it matter how upside down I am?
No. Regardless if you are $10,000 upside down or $210,000 upside down it is the same process with the short sale.
How long does it take to complete a short sale?
Typically 4 months if the right people and short sale process in place.
What documentation does the bank(s) require?
Banks will request different documentation depending on the homeowners situation. However the information that they typically request; 2 pay-stubs, 2 bank statements, hardship letter, financial statement, 2 years taxes & W-2’s, IRS 4506, authorization form and if you are self employed they are going to want a 6-month P&L. Download Short Sale Checklist.
Do we have to be late on our mortgage to complete a short sale?
No. Most banks and investors will entertain short sales on properties without the person facing foreclosure.
We have more then one mortgage, how does the short sale work?
Same as if you have one mortgage. We just end up negotiating with more then one bank during the process. Over the last 10 years there have been a lot of people that bought homes using two mortgages or where they have taken out a 2nd mortgage or an equity line. Regardless of how many mortgages or how much you owe the current value is what it is.
We owe taxes, and other liens on our property can we still complete a short sale?
Yes, we have negotiated multiple liens off of properties to allow the short sales to be completed. The reason that other lien holders place liens on properties is that they believe that there is value in the property above the mortgage balance. As for overdue property taxes the bank(s) will bring the taxes current to enable the homeowner to sell the property.
Are you a licensed by the state of Oregon?
Yes, we are both a licensed Debt Management Service Provider – DM-80085, and we are also licensed Principal Brokers with Keller Williams Realty. All brokers are required by the state of Oregon to become Debt Management Service Providers if they are negotiating short sales for consumers. Most real estate brokers do not understand short sales and are not qualified to handle consumers personal financial information. If you are interviewing agents to help you with your short sale, ask them if they are a licensed and bonded Debt Management Service Provider.
Can you stop my foreclosure?
Not always. Most banks will postpone your foreclosure auction date if you are working on a modification or a short sale.
How long does it take the bank to foreclose on my house?
In the state of Oregon the foreclosure process takes 4 months from the time that you receive your Notice of Default. How backlogged your bank is will determine how long it will take to receive your Notice of Default. It could be within 3 months or it could be a year. Some banks will not file a Notice of Default if you are working on a short sale or modification. The later you wait to pursue a short sale the larger risk of ending up in foreclosure you face.
What happens to the remaining balance?
Most banks will write off the deficiency and issue a 1099C. When you receive your short sale approval they will define what they are going to do with the deficiency. If the language in the letter does not work for you, you can cancel the short sale.
Are there any tax ramifications?
Depends. When your bank agrees to a short sale they will issue a 1099C for the discharge of debt. You will have to consult your CPA or tax preparer, however if the property is your primary residence you need to read the
IRS Mortgage Forgiveness Debt Relief Act.
If you are selling a 2nd home or an investment property you need to get a tax professionals advice, there is tax liability for secondary properties regardless if you short sale or go to foreclosure.
How many short sales have you closed?
Over the last 6 years we have closed over 500 short sales. We have worked with a lot of banks. When it comes to the largest banks; Bank of America, Wells Fargo, Citibank, JP Morgan Chase, GMAC, US Bank we have personal connections with short sale departments management because of our experience.
We have a broker that I want to list with but they don’t work with short sales, can you help?
Yes, because we are one of the few Debt Management Service Providers in the state we can assist brokers around the state with your short sale. We will work directly with your broker to make sure you have a smooth short sale transaction.
What if the buyer needs closing costs from the seller? I don’t have the money.
Your bank is willing to pay customary closing costs to enable you to short sale your property. When you complete your short sale you will not have to pay anything.
If we complete a short sale how long before we can buy another house?
Depends. Were you current on your payments or not? What was your hardship? How did it get recorded on your credit report? We have seen people buy immediately, 6 months,1, 2 or 3 years later. The key to getting ready to buy again is to work with a loan officer that understands how to get you back on track. We will put you in touch with someone that can help you explore your options.
We live outside of the Willamette Valley, can you help us?
Yes. We negotiate shorts sales all over the state of Oregon. The process is universal however there are very few real estate brokers that have successfully closed a short sale.
What is your success rate with getting short sales closed?
94% of our short sale close. Less then 35% of short sales close in the real estate industry. While brokers are good at sales they are not good with details and deadlines. If you are not great at the details and don’t have a process the banks will beat you every time, and they will force you into foreclosure.
Why hire the Oregon Short Sale Company vs. a local broker to negotiate our short sale?
We have closed more short sales then anyone in Oregon. We have the staff and process that works time after time. The one thing that no local broker can duplicate is our experience. At the end of the day short sales is what we do. Our staff is dedicated to your success.