What is a Short Sale?
A short sale is used to describe the sale of a home in which the owner owes the bank more than the home is worth.  The bank agrees to allow the home to be sold for less that what it owed.

Frequently Asked Questions for Homeowners:

Would I qualify for a Short Sale?
There are 2 main qualifications for a Short Sale Candidate:

1.A good Short Sale candidate is a homeowner who is behind on their mortgage payment(s) and is unable to keep up with all of their monthly obligations.  Having a financial hardship is an important part of the bank's review process.  Some reasons for falling behind on your mortgage payment(s) may include sudden change in monthly household income, loss of job, divorce, sudden medical obligations, and more.

2.A good Short Sale candidate also has no equity in their home.  They are not able to sell their home and pay off all of the outstanding loans that are secured against their property.

How do I select the right team to successfully manage and negotiate my Short Sale?
Before hiring just any "Agent" to assist you in a Short Sale, make sure they are qualified and understand all the work that is required to see you through to the end.  A properly trained Short Sale Agent knows how to qualify you for a Short Sale transaction and therefore has a very high success rate.  Not all Realtors® understand how to qualify you and your lender for a Short Sale Transaction.  This is one of the reasons they often have low success rates when it comes to closing a Short Sale.  Investors have around a 10% success rate. Our success rate is 100%.  We have closed every Short Sale listing we have taken! 

Be smart and make sure that you ask many questions before trusting your future, your credit, and your financial situation with a self-proclaimed "Expert" that may have just learned about Short Sales from a Title or Escrow Company.

How long does it take to do a Short Sale?
There are several stages that are involved with the Short Sale process...

1. The first stage requires working with you as the homeowner to get all of the required documentation that your bank will require us to send them.  This stage shouldn't take longer than a couple of days.

2. The second stage involves us preparing the listing paperwork and scheduling an appointment with you to see your home and prepare your home to be listed for sale.  This stage only takes a few days as well.

3. The third stage entails us aggressively marketing your home for sale and producing a willing, ready, and able buyer. This stage can take as little as a few days or as long as a few months.

4. The fourth stage is the actual presentation of the offer to your bank. This is where our expertise in negotiating Short Sales takes place.  The actual negotiation/approval can take as little as 2 weeks or as much as 3 months. On average most Short Sales take between 30-60 days from the date the offer is presented to the lender to the date of the Short Sale approval.  In most cases, 60-90 phone calls and faxes back and forth between the lender and our group are required.  The process is usually not described as "fast" in most cases, but with the right team working on your behalf, you can be at rest knowing that everything is being handled diligently and with much care.

5. The fifth and last stage to the Short Sale process is the period of time between the Short Sale Approval from the bank and the buyer closing on the home. We prepare all of the buyers we work with to be ready to close in as quickly as 3 weeks from the time of Short Sale approval. Often buyers will even close in as little as 10-14 days.

What if I don't have the money to pay the Realtor commissions?
In a Short Sale transaction you, as the seller do not have to pay the Realtor commissions or any of the closing costs; the bank covers all of these costs. The bank will also pay for any unpaid Homeowners Association fees or unpaid taxes on the home.

Are there any tax ramifications to a Short Sale?
You may have heard, "Don't do a short sale because you will get a 1099 and have to pay taxes on the difference between what you owed on your home and what you sold it for or the amount the bank wrote off." This is true, but this is not the whole story...

If you do a Short Sale you will receive a 1099 from your bank.  This 1099 is called a "1099-C." The thing that most people don't know or don't tell you is that with a Foreclosure, you will also get a 1099.  In the case of a Foreclosure the 1099 is called a "1099-A."

So what's the difference between a 1099-C and a 1099-A? The "C" stands for "Cancellation of Debt" and the "A" stands for "Acquisition or Abandonment of Secured Property". The differences are much more than you get the "C" with a Short Sale and the "A" with a Foreclosure.  It is important to know while there are many differences, the tax consequences for the "C" and the "A" are the same. You may not even be required to pay taxes on the "income" as shown on the 1099-C, but don't just assume that you won't have to pay. Before making your final decision, first consult your CPA or Tax Preparer. While we are very good at successfully closing Short Sales, we are not tax experts. Please, consult a professional CPA or Tax Preparer before beginning the Short Sale process.

One more thing you should know is that in approximately 99% of the cases, the amount of the loss at a Foreclosure is greater than that of a Short Sale. If you are going to receive a 1099 in either case, it is in your best interest to do a Short Sale instead of allowing your property to be sold for less at Foreclosure or as an REO (Real Estate Owned or Bank Owned Property). Now that you know this, don't allow rumors and incorrect information influence an important decision in your life. Losing your home to Foreclosure is always the last resort and you should seriously look at all of your options before letting your home go to Foreclosure.

Are there any credit consequences to a Short Sale?
This question is asked very frequently and has many different variables involved. The first thing to keep in mind is that the moment you go 30+ days behind on your mortgage payment, your bank has the right to report to all of the credit bureaus that you are 30 days behind on your payments. When a late payment is reported to the three major credit bureaus, it does have a direct affect on your credit. After going through a Short Sale or a Foreclosure, most people have multiple 30, 60, 90+ days late payments reporting on their credit report.

When the actual Short Sale is completed, most banks will report to your credit report that your account was "paid in full for less than the full amount". You credit report may also be marked as "settled". It is important to keep in mind that each lender has a different way of reporting that a Short Sale was done, but this is the most common language that is seen.  If your home were to go to Foreclosure you would most often see the bank report "Foreclosure" on your credit report.

It is difficult to gage how much of a credit scoring affects a Short Sale vs. a Foreclosure. Credit experts will agree that neither a Short Sale nor a Foreclosure is favorable to your credit or credit score, however, the impact of a Foreclosure is much worse. We strongly advise you to work with a Credit and Credit Scoring Expert for more specifics on this topic, and ways in which to improve your credit after the Short Sale is complete.

Why exactly would a bank agree to a Short Sale?
It is much more cost effective for a bank to do a Short Sale rather than Foreclose on a home. Banks are not interested in owning real estate. Banks make their money from receiving monthly mortgage payments. While banks will take a loss during a Short Sale, they can ofter minimize their loss by as much as 10-20% over a Foreclosure.

When should we begin working on the Short Sale together?
Ideally we would like to begin working on your Short Sale as soon as you recognize that you are unable to keep up with your payments and will be falling 30+ days behind. The important thing for you to know and keep in mind is that the sooner we begin working with you on the short sale process, the more you increase your chance of a successful closing. Don't wait any longer, act today!

Frequently Asked Questions for Buyers:

How do you know that the bank will accept our offer?
We really don't know with 100% certainty that the bank will accept your offer.  What we do know, is that banks are typically willing to accept an offer that is within 85-90% of current market value. We price all of our listings very appropriately so if your offer is at or very near market value, we feel confident that it is possible to get the Short sale approved, we'll get it done.  We are experienced Short Sale Negotiators.

Is there a Foreclosure sale date scheduled?
Foreclosure sale date information is public information and can be found by doing a small amount of research online. We get several Foreclosure sale dates extended every month so please don't ever let a sale date scare you away from one of our listings.  Banks will extend a sale date numerous times.

What is a REO Property?
REO is an acronym for Real Estate Owned property. This means that it is a home that has already been foreclosed upon and is owned by the bank. Each bank will handle the sale of the property differently. Certain banks will require a buyer to be pre-qualified with that bank prior to reviewing an offer. Countrywide Home Loans is an example of one of those lenders.  Therefore, a potential buyer must submit a Loan Status Report provided by a Countrywide lender even though they might already be pre-qualified with a different lender of their choice.


Please fill out the form below to have us determine if you are a candidate for a Short Sale or if you would like to receive a list of Short Sale or REO properties for sale.