How Long Will A Short Sale Take?
The short sale negotiation process is a lengthy one. It may take several months, possibly a year or longer to get an approval. Many lenders have multiple levels of red tape, insurers, and investors that we will have to maneuver through in order to get the short sale approved. It is important to be patient during this long process.
My House is Going to Foreclosure -- Will I Have Enough Time?
Maybe, maybe not. Just starting a short sale will not automatically stop a foreclosure. However, many times we can convince a lender to stop the foreclosure to let us attempt to negotiate the process. So, while there are no guarantees, it does not hurt to try.
Can I Stay in the House?
The key word in "short sale" is sale. The purpose of a short sale is to get the property sold. So you will be moving. This is not a program that can stop a foreclosure and allow you to keep the house indefinitely. It will be easier to sell the house if it is vacant, so you should make plans to move as soon as possible.
How Do I Know This Will Work?
You don't. We cannot, have not, and will not make any promises to you that this will work. Once you missed a payment, the lender is in charge and can proceed to foreclosure if they want to. But we know they do not want to and we are very good at presenting alternatives to the lender that they often want to accept rather than foreclose. However, NO PROMISES are being made...the lender may accept the short sale or it may not.
Will I Get Any Money from the Sale?
NO. A universal requirement of lenders in granting a short sale is that the borrower will not get any proceeds from the sale of the property. The lender is going to take a loss on your loan - they are not going to let you get any money.
What Happens if this Doesn't Work?
Your house will likely go to foreclosure. A short sale is something we try after you have exhausted your other options. However, if the debt exceeds the value on the property, the lender will want to work something out. While we cannot make any guarantees, there is a very good chance it will work.
What is a "Release"?
A lender may offer to "release" its security interest against the property in exchange for less than the total amount of the note. A release will allow the property to be sold without paying off he obligations of the note. However, the note is not satisfied.
• Advantages: a successful short sale will allow the property to be sold and thus avoid a foreclosure.
• Disadvantages: The remaining debt on the property (also called a deficiency) still exists. You are still liable for the note -- in other words, you still owe the money.
• Reality: It is not likely the lender will pursue the deficiency unless you have other significant assets.
What is a "Satisfaction"?
A lender may agree to accept less than it is owed as complete and total satisfaction of the note and release its lien against the property.
• Advantages: Your note and obligation to the lender are satisfied for less than you owe. When the property is sold, the debt is paid off completely.
• Disadvantages: Any equity you have in the home will be lost.
If you have additional questions about short sales not covered here, please contact Realty1One.
