Frequently Asked Short Sale Questions

What is a Short Sale? In the world of Real Estate, a short sale refers to the sale of property for an amount less than the amount owed on the property. In the short sale scenario, the bank agrees to accept less than the full balance due on the debt, and usually ‘forgives’ all or a large portion of the difference.

Would I qualify for a Short Sale? A good Short Sale candidate is a homeowner who is struggling to keep up with all of their financial obligations and/or behind on mortgage payments. Some of the reasons that lenders accept to approve a short sale include sudden reduction in monthly income, loss of job, divorce, and more.

Why 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 doing a Short Sale, they can often minimize their loss by as much as 20% over a Foreclosure, and they never have to take on the liability of owning the home.

How will the Short Sale affect my credit? Banks have the option of submitting the short sale to the credit bureaus as "Paid in Full" or "Settled for less than full balance". As far as your credit score is concerned, there is no evidence whatsoever to support that a short sale will lower your credit score. Some have the idea that a short sale is like a bankruptcy or a foreclosure. That's far from the truth! In a short sale, the lender is simply allowing you to pay less than you owe! The negative credit from a short sale comes from the associated missed mortgage payments.

Who pays the realtor commissions, title company fees, etc? Your lender pays all of the selling fees involved with the sale of the property.

What if my home is already in Foreclosure? The foreclosure will usually be suspended during the short sale process, but it's imperative that you contact us right away!!!

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 it 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. Most Real Estate Agents do not understand how to properly process a Short Sale Transaction. This is one of the reasons that less than than 10% of short sales are successful. The Neill Group’s success rate is about 10 times higher than the average real estate agent. We are true “Short Sale Experts”. We have built a great reputation in the real estate community and have even been asked to teach short sale classes for some of our competitors.

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 or Real Estate Seminar.

I heard that Short Sales rarely close and banks don’t approve very many of them. Is this true? It is true that you may have heard this from someone – we certainly have – however, it is not accurate. Most Realtors are not educated on how to successfully close a Short Sale. Reference back to How do I select the right team to successfully manage and negotiate my Short Sale? before believing others’ “negatively-tainted” opinions on Short Sales.

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 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. Give us a call to get the process started!

*There are many factors involved in a short sale. We always recommend consulting with a qualified real estate attorney and CPA or tax preparer prior to ever starting a short sale.