What is a Mortgage?

A home mortgage is a loan to finance the purchasing cost of your home. Your home is collateral for the loan and a legal contract is signed to pay the debt along interest, taxes and other costs according to the agreement. The payment duration of this loan normally range from fifteen to thirty years.

A proper plan of the monthly installment is designed that is mutually agreed by both parties signing the contract.  If you are unable to pay the debt within given time-frame, the lending authority has a right to get back the property and sell it to recover the amount and you will have to vacate the home in this scenario.

What is a Short Sale?

In real estate a short sale usually becomes an option when the borrower is in financial difficulties and unable to pay the mortgage amount; Keep in mind this does not always mean that they are delinquent yet but if they don’t receive help they will be. In the case of a short sale, the property is sold to a third party (not the bank) and the proceeds from the sale go to the lender. After selling the property, the lender may either forgive or may file a judgment against the borrower to pay the difference between the original loan and the amount received from the sale of property. In some states, a deficiency amount must be forgiven legally in case of a short sale.

What is a Short Sale Negotiator?

A short sale negotiator is an individual or a servicing company which negotiates with lender, or lien holders, on behalf of seller. The aim of this negotiation is to convince the lender to accept the lower amount than what is owed on the property. There are a number of terms used to define a short sale negotiator like short sale agent, short sale processor, debt resolution expert, loss mitigation expert and short sale expert.

What to Look for in a Short Sale Agent?

 Acceptance of a short sale proposal many times depends mainly on the negotiator. Not all the negotiators are skilled and experienced. While hiring a short sale agent you should confirm that the agent is skilled, experienced, have related knowledge and have already closed short sales in the past in his portfolio. An experienced short sale agent will be in a better position to guide through the negotiation process.

Should I Opt for Short Sale Over a Foreclosure?

Short sale is a better alternate to avoid foreclosure, but needs a lot of struggle, stress and lender’s approval to close. Sometimes, it is better to let the home go to foreclosure than having the short sale stress and long wait. The choice of foreclosure may depend on the legal and financial consequences. The better option is to ask a real estate consultant and attorney to avoid any kinds of complications. A real estate consultant cannot provide the legal advice unless has the license to practice law.

How to Get Multiple Offers in a Short Sale?

The best way to get multiple short sale offers is to price short sale below the market value. This will inspire more buyers to bid for your home. Beware of pricing a short sale much lower than the market price because banks don’t take a low bid price and also buyers get confused and make lower offers. The banks and lenders also don’t approve a short sale having much lower price.

Should I Stop Making Mortgage Payments to Opt for a Short Sale?

It is a myth that you should be behind your mortgage payments and must be in default to opt for a short sale. However, there are specific scenarios in which your mortgage payments must be delinquent. Yes, for most of those who are involved in government loans because in some case government wants you to stop making your mortgage payments.

How Can I Start a Short Sale Process?

Every Lender processes their Short Sales to the tune of their own procedures. Knowing what steps to take at each bank can change how smoothly your Short Sale transaction will go. Working with the right short sale negotiator at ACG makes starting the process of a short sale quick and easy. You just need to contact our short sale agents to be your consultant to begin negotiating on your behalf with your lender.

Why Do I Need a Short Sale Negotiator?

Hiring the services of an experienced short sale negotiator to proceed with your transaction can clearly make the difference to you with having a detailed know how of how to resolve everyday problems that only experience on a large scale can bring. You may not be able to deal with all the technical details as well as other difficulties that may arise when going through the process of a short sale which is where the right negotiator’s guidance can make the difference. Short sale negotiators can save time, money and your home from foreclosure with their extensive experience of dealing with short sales challenges every day in a business that changes regularly.

How Much Will I Have to Pay to Sell My Home if I Opt for Short Sale?

As a seller you don’t need to pay anything for the processing of your short sale. Sounds too good to be true? It’s not. Your lender agrees to pay these expenses to avoid the bigger loss in case of foreclosure at which time they may have to turn around and sell the home and pay the same expenses anyways. All the required expenses including real estate commissions, title and escrow fees are paid by the lender as part of the short sale approval.

For Real Estate Professionals ACG’s processing services can be paid by a buyer or any other party (only due upon successful close of escrow) or start as little as half a percent of the total gross sales price out of the listing agent’s commission. NOTE: This typically requires the buying agent to give up a half a percent to the listing agent in order for ACG to receive 1% of the gross sales price which is the standard rate. Pricing may vary based on sales price. Call our Customer Service for further details at 888-934-3444.

Why Do Banks Agree to Do a Short Sale? 

After the recession in the real estate industry banks have been trying to recover as much as they can. They have found that foreclosure is a much more costly solution when compared to the short sale. Banks are not interested in owning the real estate. Instead of owning the home they prefer to allow the borrower to sell the home on the market for alesser amount. In some cases, statistics show that foreclosing can cost a bank 10%-20% more than a short sale.

What is the Best Time to Start the Short Sale Process?

The sooner the better. Once you realize that you are unable to pay the mortgage installments and you decide to get rid of the costly home, it is the best time to start the process of a short sale, provided that you don’t want to opt for loan modification. The more quickly you start the short sale process, the greater your chances are of success.

Do I Have to Pay My HOA Fees?

It is strongly recommended paying HOA fees as they are owner’s personal obligation. It can result in credit damage, lawsuits or other collection efforts. Also, the loans backed with Fannie Mae will not pay HOA fees in a short sale. This can inhibit the closing of a short sale unless one of the parties (seller or buyer) can pay off the debt at the close of escrow.

Do I Have to Pay My HOA Fees?

It is strongly recommended paying HOA fees as they are owner’s personal obligation. It can result in credit damage, lawsuits or other collection efforts. Also, the loans backed with Fannie Mae will not pay HOA fees in a short sale. This can inhibit the closing of a short sale unless one of the parties (seller or buyer) can pay off the debt at close.

What Documents are Required for Short Sale?

The requirements for short sale documents depends upon your bank and lender. The typical documents required for a short sale are given here:

  • Hardship letter – Explains your current hardship
  • Pay check stubs – Your most recent pay check stubs if employed
  • Bank statements ­– Your most recent bank statements for the last two months
  • Authorization form – Authorization form
  • Financial statement – Statement of all your monthly obligations

Absolute Consultant Group will provide the assistance for defining the documents your lender will require and expert experience on the questions that come up when filling them out.

How Can I Qualify for a Short Sale?

The first thing to qualify for a short sale is to have a mortgage greater than the market value of your home. Secondly, you must have the financial hardship. The requirements for hardship may depend up the lender and your bank. Financial hardship may include a number things, such as:

  • Loss of employment
  • Divorce
  • Sickness
  • Disability
  • Loss in business
  • Investment loss
  • High interest rates
  • Inability to save for retirement

There may be some other situations that may help qualifying for a short sale.

Can I Deal My Own Short Sale?

No, In California, you need a license and experience to deal a short sale. Most of the real estate agent don’t have the experience or the connections at the bank to efficiently get a short sale completed. You need to hire a short sale negotiator if you are planning to opt-in for a short sale.