What is a Short Sale?

A short sale in real estate is a form of agreement between the seller of the home that is about to begin the foreclosure process and its lender, letting the house sell for less than what is owed on the mortgage. The lender accepts less than what is owed on the mortgage to avoid the foreclosure process. This short sale would result in a sale price substantially discounted to the home buyer. The buyer proceeds with the purchase of the house as any conventional transaction of goods and roots.

Why does the lender agree to a short sale?

Lender are in the business of making money and reducing expenses. When a borrower is late in the month, the lender has the right to take the property to pay off the debt. However, in the current state of real estate market, many properties can not be sold for the amount that is owed. You may be able to convince the lender to accept less of the total debt if the lender believes that you can recover more money through a short sale than through a foreclosure.

 

How long does it take for the closing of a short sale?

This depends entirely on the lender. Some lenders take only two weeks, others more than six months. The only way to know is to start the process. The key is to make sure that the short sale form is complete, and that you are communicating with the lender daily.

 

I want to make a short sale and I have a second mortgage, does this disqualify me?

No. Both lenders will need to be satisfied in some way to complete the short sale. If your first lender will be paid in full through the sale, then you just need to negotiate the terms with the second lender.

 

Will my credit be destroyed with the short sale?

Yes and No. You may not see the short sale on your credit. Therefore, many of the agencies report the transaction as "Paid Mortgage" after a short sale. Any delay in payment in your history will continue to appear, as well as a Notice of default in payment. What will not be reported is a foreclosure. A mortgage can result in the lender not reporting the mortgage as lost. In the current credit market, a foreclosure can prevent you from getting a mortgage for 5 years, and more if it is a bankruptcy.

 

What documents are necessary for the short sale process?

Los documentos individuales necesarios para proceder con una venta corta dependen de el prestamista.  Usualmente el prestamista requiere una carta de decadencia detallando las circunstancias detras de la venta corta.  Un contrato valido y firmado para la venta y compra , preliminary HUD-1 settlement statement y un preliminary estimate of proceeds al prestamista.  Puede que haya otros detalles que el prestamista requiera, como comprobantes de pago, declaraciones bancarias, etc.

Que es Decadencia?

Algunos ejemplos de decadencia incluye:

  • Ingresos Reducidos o desempleo.
  • Incapacidad para trabajar por rason de salud.
  • Separacion o divorcio.
  • Gastos Medicos.
  • Fracaso de Negocio.
  • Muerte de Pareja.
  • Ajuste de pago hipotecario o Aumento de gastos mensuales.
  • Cualquier otra circunstancia que limite su habilidad de pagar su hipoteca.

 

Cual es el efecto de una venta corta para el vendedor?

El vendedor se libra de la deuda.  Algunos prestamistas pueden declarar la transaccion como un acuerdo, y podra lastimar el credito de el vendedor.

 

Que tan tarde en el proceso de foreclosure puede usted iniciar una venta corta?

Depende de las leyes estatales y regulaciones, un foreclosure puede proceder 35 dias despues de la fecha en el aviso registrado.  Por esa razon, el tiempo es muy importante y usted debe darle una ventanilla de 60 dias al prestamista para efectuar la aprobacion de una venta corta.

 

Si el vendedor esta iniciando una bancarrota, esto afectara la venta corta de la propiedad?

Absolutely, as most lenders will not consider a short sale if the borrower is proceeding with a bankruptcy. Negotiating a short sale between parties is considered a collective activity and this type of negotiation is prohibited in a bankruptcy. Check with your estate agent to determine how it is affected in your specific situation.

 

Are there tax implications in a short sale?

I can refer you to a tax attorney to give you information regarding your specific situation.

 

Can I make a short sale with real estate investments?

 

Of course. Any type of property can go through a short sale.

 

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