Short Sale FAQ
Short Sale Frequently Asked Questions
A lot of these questions are asked by almost every one of our clients. Although we can’t give legal or tax advise, (which seem to be the highest amount of questions we get…) we CAN give great referrals to Law Firms and CPAs to answer all your questions!
What is a short sale?
A short sale is when a bank or mortgage holder agrees to allow you to sell you home for a balance less than what is owed to avoid foreclosure.
How long does it take to do a short sale?
Some short sales are VERY fast, some can go very slow. A good rule of thumb is that you can expect a waiting time of 35-90 days for acceptance after we receive an offer on your property.
What is going to happen to my credit?
Believe it or not according to myfico.com, your credit score suffers more than anything else due to the late payments caused by the distress. The actual short sale or trustees sale is not what impacts the credit as much.
What will my credit read after a short sale?
Although there is no set standard, it is common for you loan to read “Debt settled for less than full amount – Closed.” This is not always the case though seems to be very common.
Do I really need to pay taxes on the amount forgiven on a short sale?
All banks are REQUIRED to submit a 1099 to the IRS for any debt relief approved. There are certain laws in effect to help home owners with these taxes. It is best to contact your CPA immediately for how these laws apply to you. We can provide GREAT referrals for this as well.
Do I qualify for a short sale?
If there is a case of some type of distress, then more than likely you will qualify for a short sale. It is crucial you schedule a meeting with us the instant you know you are headed down the road. TIME IS OF THE ESSENCE!
Does every bank approve short sales?
Every bank looks and makes the best decision on whether proceed with a short sale or a trustee’s sale. In the end the bank is looking to NET the most amount of money which normally occurs through shorts sales.
I don’t have any money to pay REALTOR commissions, how can I sell my home?
The banks cover the REALTOR commission from the proceeds of your sale. You will not be charged a dime for REALTOR commission in a short sale.