1. What is a short sale?
A Short Sale is when a homeowner sells a property for an amount less than what is owed to the lender.
The lender does not have to agree to accept a short sale, and will make a
business decision as to whether or not the short sale of the property is in their best
interest or not. There are many considerations and variables used by the lender in making this
decision. One important factor of course, is how far along in the foreclosure process you are,
and also, how much is the buyer’s offer. Lenders request a full financial disclosure when
evaluating their decision, such as: pay stubs, tax returns, bank statements, etc. It is quite
similar to applying for a mortgage.
2. How can Short Sale Legal Service help me?
We help homeowners in many ways, yet, we are quite different than all others who claim they
can help too. Short Sale Legal Service is the only one-stop shop that combines the critically
needed services of both a real estate brokerage and attorney counsel. In addition to
providing all the traditional short sale real estate services (list,market & sell your home on
the MLS), we are the ONLY service that also includes legal representation to get all your
questions answered and to negotiate your best possible outcome. We offer the most
comprehensive program around for homeowners who have recognized that doing a short sale is
their best option.
Best of all – there are NO fees! The lender pays all costs associated with doing a short
sale. With our one-of-a-kind program, you get the best personal legal counsel & advice, as
well as get out from under a heavy financial burden.
3. Do I really need an attorney when doing a short sale?
Yes. You definitely should! It’s important to have an attorney negotiate, review and confirm
that any deficiencies (shortages) are forgiven AND that what was agreed upon is accurately and
explicitly stated in writing. Having a Realtor alone do this unfortunately leaves you wide
open and exposed. It is NOT the same as having an attorney protect you.
4. How does a short sale affect my credit?
Most experts agree that a short sale is less damaging to a borrower’s credit history than a
foreclosure. There are a number of reasons for this. Most of the decline in one’s credit score
is the result of missed payments. The more payments you miss – the more your score takes a
hit. With a short sale, your credit report may include something similar to, “Settled for
less than owed” or “Settled.” With a ‘foreclosure,’ that IS what will be reported: a
foreclosure.
Additionally, the fact that you attempted to do something to resolve the issue is a plus in
your column. It clearly demonstrates that you were proactive, and this alone experts agree
will act in your favor in the future. In fact, Fannie Mae recently announced that as of July
1, 2010 they will begin lending to homeowners who went through a short sale in as little as
little as 2 years!
5. Shouldn’t I just try to work something out with my lender?
Yes. In fact, when you come to us, we assume you probably have already explored other options
with your lender. Most of our clients have already spoken with their lender many times. The
truth is, though, most of these attempts fail. According to CNNMoney.com, up to 72% of
homeowners who try to work things out with their lender eventually foreclose on their home
anyway within 4-8 months!
6. What are the advantages of a short sale?
The advantages to doing a short sale are that it is far less damaging to your credit score,
you’re able to buy another home much sooner (new FHA guidelines: for a short sale – 2 years),
and perhaps most importantly, it also provides a final closure that ‘walking away’ or
‘foreclosuring’ does not. With a foreclosure or walk away, you’re just never certain what’s
lurking around the corner. You’re never sure IF or WHEN they’re going to come after you. In
the state of Michigan, in the worst case scenario, your lender can garnish your wages. With a
short sale – it’s you’ll know exactly where you stand when your attorney has completed
negotiations with your lender. For homeowners, this knowledge alone, brings a huge sigh of
relief!
7. I owe more on my home than it’s worth. Can I still do a short sale?
Yes. Actually, you’re a perfect candidate, but of course, you would still have to be able to
demonstrate a financial hardship of some kind, such as: loss of a job, loss of income, forced
job relocation, death, divorce, medical bills, etc.
