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Short Sale Frequently Asked Questions | Real Estate

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Short Sale Frequently Asked Questions
Real Estate
Short Sale Frequently Asked Questions
 What is a Short Sale?
  • A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. (Wikipedia)

Would I qualify for a Short Sale?

There are 2 main qualifications for a good Short Sale candidate

  • A home owner who needs to sell their home and cannot sell the home at a price to cover all liabilities on the property due to a declining market.
  • A homeowner who has come across a hardship and can no longer afford to keep the property.


?Note: you do not have to be behind on your mortgage payments to qualify for a short sale.


How long does it take?

  • The process to list the home can be done in as little as a few days. The short sale time frame depends on the bank. It can take as little as 4 weeks or as long as 4 months once an offer has been made on the house.


What if I don’t have money to pay the Realtor commissions?

  • You as the seller do not have pay the Realtor commissions, it comes out of the bank’s proceeds.


Are there any tax implications to a Short Sale?

  • Tax laws are changing constantly so please consult with your CPA or Tax Preparer for more detailed information.


Are there any credit consequences to a Short Sale?

  • The general consensus is that a short sale is less harsh on credit scores than a foreclosure. However, you should consult a credit professional for more detailed information on the impact from the short sale.


Why would a bank agree to a Short Sale?

  • It is more cost effective for a bank to do a Short Sale rather than Foreclose on a home because they limit their loss.


Am I liable for the difference between what I owe and what the home sells for?

  • Before closing on a short sale, we request the lender releases the Seller from additional liability on the note. The liability issues should be consulted by an Attorney and your bank.


When should we start?

  • Now! A short sale can go very smooth if the mortgage is still current and it can still allow you to qualify for FHA financing without a waiting period of 3 years. This means that you can get back into home ownership sooner rather than later. If you are no longer current then we will work with the bank to try and avoid the foreclosure process, but we need to start soon.



For more information I can be reached at Chris@sellectrealty.com 

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