In this, my first blog, I am going to give you the ins and outs of a short sale. Short sales have become a HUGE part of the real estate business. I would say that they make up for about 90% of the business that comes through my office. So many homeowners today find themselves owing more on their mortgage than their home is now worth or finding that they can no longer afford the payments. It used be that the only way out from underneath this situation was to foreclose. Now, courtesy to the United States Government, we have the option to do a short sale rather than a foreclosure. Many people do not understand what the difference is between the two so I will give you the Cliffs Notes! Essentially, a short sale is a blemish on your credit which, after as little as two years, you can possibly buy another house. Whereas a foreclosure stays on your credit for 7 years, much like a bankruptcy. You would need to wait about 5 years to buy again. By doing a short sale, you’re not only saving your credit from some major bruising but you can stay in the house while the sale is approved by your lender which can take several months. Also, if you can afford to do so, you can continue to make your mortgage payments and buy a house right away.
So basically, a short sale is where the property is sold for less than the balance owed on the mortgage. What we do as the listing agent is list the property and market it as normal. The home is advertised on the MLS, Realtor.com and all the other avenues normally used. Once an offer is received, we then submit the paperwork to the lender and work with them to get the property closed. The whole process can take anywhere from 2 months to 12 months from start to finish depending on which lenders we have to work with, whether there are 1 or 2 mortgages, whether we are dealing with an HOA and many other factors. The process can seem overwhelming for those who are not around it on a daily basis but honestly, it is such a normal thing nowadays.
Many homeowners are concerned with the ramifications of doing a short sale and think maybe they need to hire an expensive attorney to take them through the process. I have met many sellers in my time that have forked over $3,000 or more to an attorney who is going to help them with the process. The truth is that as long as the home is your primary residence, you can short sale with no penalty. You get to walk away and the debt is forgiven. You really don’t need an attorney to help you with that. Just make sure that you go with a reputable Real Estate Agent who has a lot if experience in the field of short sales (Ahem, me!)
Check out the IRS website at http://www.irs.gov/individuals/article/0,,id=179414,00.html This is where you can find the information on the bill that was passed that allows homeowners to short sale their homes without penalties or tax liability providing the property is their primary residence.
The best part of doing a short sale is that the bank, your lender pays the closing costs. They pay the title fees, filing fees, closing fees and real estate commission. It doesn’t cost the homeowner a penny!
If you would like more information on your options, you can call me anytime at my office or feel free to e-mail me. Anything we talk about is confidential and there is no pressure to do anything. I am available 7 days a week via phone, face to face or e-mail.
Nicola Hughes, Broker/Owner
Hughes Homes Realty
407-557-8775
hugheshomesrealty.com
info@hugheshomesrealty.com
