In Real Estate, a Short Sale - What is it?  

A Short Sale is when a lender agrees to receive less than the original amount owed on the property, via negotiations, to be able to release the lien. 

The Short Sale Process
The first step is to find out if a short sale is an available option for you.  

Then the property is put into the market, and the Hardship Package is given to the lender. 

When an offer is received it is submitted to the lender. If the lender approves the offer, the file moves to closing

The Seller's Benefits, The Buyer's Benefits 

(1)The homeowner can eliminate their mortgage debts without financing repairs for the purpose of the selling the property. 

(2)The lender pays for commissions and closing costs. 

(3)The seller’s credit report is not negatively affected by a foreclosure. Bankruptcy can be prevented. 

(4)The homeowner can stay on the property until the procedure is finished. 

(5)Buyers can buy property that has a below-market price. Also, the short sale properties are usually in better shape than foreclosure properties (don’t need as many repairs). 

Work with a Real Estate Agent, Broker. 

A short sale has the potential to become very complicated. Lenders prefer to deal with a realtor instead of with the buyer. As a real estate agent, I am very persistent and patient with the short sale, using my abundant amount of experience to make the process as smooth as possible. 

There is no cost for professional representation! The lender covers the costs of the real estate commission. Make sure a qualified real estate professional is representing you!  

FORECLOSURE VS. SHORT SALE  

Current or Future Employment
Foreclosure; Employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions. A foreclosure in many cases is ground for immediate reassignment or termination. Many employers are requiring credit checks on all job applicants. A foreclosure is one of the most detrimental credit items an applicant can have and in most cases will challenge employment. 

Short sale: A short sale is not reported on a credit report and is therefore not a challenge to employment. 

Deficiency Judgment
Foreclosure: In 100% of foreclosure (except in those states where there is no deficiency) the bank has the right to pursue a deficiency judgment. 

Short sale: In some successful short sales it is possible to convince the lender to give up the right to pursue a deficiency judgment against the homeowner. 

Deficiency Judgment (amount)
Foreclosure: In a foreclosure the home will have to go through an REO process if it does not sell at auction. In most cases this will result in a lower sales price and longer time to sell in a declining market. This will result
in a higher possible deficiency judgment. 

Short sale: In a property managed short sale the home is sold at a price that should be close to market value and in almost all cases will be better than an REO sale resulting in a lower deficiency. 

Future Loan with any Mortgage Company
Foreclosure: On any future 1003 application, a prospective borrower will have to answer YES to question C in Section 7 of the standard 1003 that asks "Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?" this will affect future rates. 

Short sale: There is no similar declaration or question regarding a short sale. 

Credit Score
Foreclosure: Your score may be lowered anywhere from 250 to over 300 points, typically affecting your score for over 3 years. 

Successful short sale: Only late payments on mortgage will show and after sale mortgage will be reported as paid or negotiated. This will lower the score as little as 50 points if all other payments are being made. A short sale's effect can be a brief as 12 to 18 months. 

Credit History
Foreclosure: Foreclosure will remain as a public record on a person's credit history for 10 years or more. 

Successful short sale is not reported on credit history. There is no specific reporting item for 'short sale'. The loan is typically reported 'paid in full, settled, paid as agreed'. 

REO - definition of REO - Real Estate Owned. Property which is in the possession of a lender as a result of foreclosure or forfeiture. 

Foreclosure - definition of foreclosure - The legal process by which an owner's right to a property is terminated, usually due to default. 

BPO, or broker price opinion, is a broker's opinion of the value of a property in the current market.BPOs are often associated with foreclosures and short sales.  

Make sure a qualified real estate professional is representing you! A short sale is not a regular transaction, and hiring an inexperienced realtor you are risking foreclosure. Do not make this mistake. There is no cost for professional representation! The lender covers the costs of the real estate commission.  

I don't charge any fees for short sale listing and service! In successful short sale your bank pays for the realtor commission, attorney fees, title company fee, and any other closing costs.
Simply list and sell your short sale property for free. 

Do not hesitate and call me for free service and more information, or if you have any questions about listing and selling your short sale property for free!