1. What will happen to my credit?
When someone goes through the short sale process, the loan will still show up as “paid” on their credit report. However, there may be a notation somewhere that will indicate that the complete payment was less than the original amount owed. In general, it is better to have that on a credit report than to have a foreclosure on your credit report.
2. Where can I find an investor to help me with my short sale.
It varies on where you live, but like other investors, short sale investors market with bandit signs, in the newspapers, etc. You can call them and ask them about their experience in working with short sales, and then ask them if they would work with you. You can also find these investors at REIAs.
3. What is a short sale?
A short sale occurs when the mortgage lender agrees to accept less than the amount owed, in an effort to avoid foreclosure. It is a pre-forclosure sale. This will result in a discounted purchase price for the buyer. The new buyer will acquire the property with financing the way they would any other property, the difference may be that they may not have as much time.
4. Can I make money if I sell my house as a short sale?
In most cases the seller does not profit from a short sale. The advantage of a short sale is that the sellers credit will remain in tact.
5. If I declare bankruptcy, how will that impact my ability to do a short sale.
In most cases, if you have already declared bankruptcy, as the homeowner, they lender will not consider a short sale. This is because the short sale is usually considered a way to collect, however, if the person declared bankruptcy collection is not allowed.
6. What documents do I need to include in my short sale package?
The documents will vary with each lender. However most commonly, lenders ask for a hardship letter, purchase/sales contract, pay stubs, bank statements, personal financial sheet (budget) to start off.
7. Will my mortgage company send someone out to appraise my house, if I do a short sale?
All lenders will have a BPO/ full appraisal of the property before accepting or rejecting the short sale offer.
8. I think I am in already pre-forclosure, can I still do a short sale?
Most short sales will require a 90 day window. So, if you have that time frame, you may be able to try.
9. What about my due on sale clause?
A due on sale is a clause in your original mortgage or deed of trust that indicates that upon sale of the property or transfer of title you agree to pay off the entire loan balance.
10. Can I do a short sale if I have equity in my property?
If you have equity, most likely, the bank will foreclose on the property and have you try to sell the property retail.
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