Short Sale FAQ


Why do a short sale?
         
Very simply, a short sale can free you from a mortgage you can’t pay, a house you can’t remain in, and a foreclosure notice you don’t want to see.

What is a short sale?         
A short sale is a real estate sale where the seller’s mortgage lender agrees to accept a payoff of less than the balance due on the loan.  When a homeowner is “underwater” on  their mortgage, a short sale is one option for getting out of mortgage trouble.

Who qualifies for a short sale?
         
If you owe more on your mortgage than your home is worth, you are a good candidate for a short sale.  If you have no equity and need to sell, a short sale is a definite option.

Might my lender agree to a short sale?          
There are more than 6 million homeowners currently in default on their mortgages.  It costs a lender tens of thousands of dollars to foreclose on each troubled mortgage.  Lenders want to save money and they don’t want to own homes through foreclosure.  They would rather you sell your house in a short sale so they don’t have to foreclose.

Are there consequences of a short sale?         
Yes.  The good consequence is that you get out from under a mortgage that is dragging you down.  You get a new start.  Other ramifications – you may be required by to repay part of your mortgage shortage – your “deficiency.”  Sometimes this is done through a 0% interest promissory note.  If your lender forgives your deficiency, this debt forgiveness may have to be included as taxable income.  However, similar consequences may follow you if the lender takes back your home in foreclosure.  Contrary to popular belief, there is no real “walking away from your home.”  We have a network of legal and tax professionals we can refer you to for expert advice on your particular financial situation.

Do I pay a real estate brokerage fee for a short sale?         
Lenders typically will allow a real estate agent to be paid compensation for assisting a homeowner with a short sale out of the sale proceeds.  There are no other fees you would have to pay directly to a real estate agent.

How long does it take?         
A short sale can be done in as short as 4 weeks.  Typically, a short sale takes 4-6 months from listing to closing.  There are many factors that affect timing.  We can evaluate your situation and give you an estimated timeline.

Can you work with my lender?         
Yes.  We work with all lenders on short sales - both national companies like Bank of America and Chase, and regional Tallahassee lenders like Florida Commerce, and Envision Credit Union.

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