Thinking about a Short Sale in Texas?
Have you been doing your research on the many different options that are available to you that will help you avoid foreclosure in Texas? Are you considering to short sale your home? This is a great product that most mortgage institutions offer before accelerating a foreclosure on the property. A short sale offers many benefits as well as some consequences. Here are 5 things to consider before selling your home through a Short Sale.
Short Sale Eligibility
First things first, a short sale is an application process and is not a guarantee work out. The homeowner must have a valid hardship reason for being in or near default of the mortgage loan. Your home’s value must also be lower than the amount owed on the mortgage. The short sale lender usually requires the property to be on the market with a listing agreement signed by the seller and a local licensed Realtor. If you have a buyer and can provide an offer on the property this also increases your odd’s on your eligibility. Your lender will also want to see your financial docs such as pay stubs, bank statements and recent tax returns. In the end you are having to show proof that you can no longer afford the property. Short Sales are for homeowners who may or may not be behind on their mortgage payments but no longer have the income to pay off the entire debt, which is more than the home’s current market value.
Short Sale Timeline
When I first heard the word short sale, I immediately thought it was some type of transaction that closed quickly. Then I learned this term is very miss leading and related to the homeowner selling their home short of what they owe and had absolutely nothing to do with a timeline. The short sale application process can take anywhere from 4 – 12 months to complete. Sometimes longer. When you submit an offer for a short sale, the bank doesn’t treat it like a traditional home seller would. The bank has a specific review process that requires a lot of document collection from the homeowner as well as outside appraisals and negotiations. You must have patience and strong efforts when working through a short sale. You are simply at the banks mercy and can only go at their speed. The time it takes to provide the bank with requested documents also dictates the length of any short sale. The short sale approval can take a while, but can help the homeowner stay off the foreclosure list while being reviewed.
Short Sale Win Win!
The short sale not only benefits the home owner avoiding foreclosure, but it also benefits the lender. When a bank forecloses on a property, they spend a lot of money to do it and it also just doesn’t look the best for the mortgage company. A short sale can save the mortgage company a lot of money and head aches. If the property is foreclosed on, the bank would have to evict the homeowner and manage the property until it was sold – tacking on more expenses. The mortgage company doesn’t want your house, they want you to make your mortgage payments. They will do everything they can to work with you before actually foreclosing on the home. If they can get your money through a loan mod, then they will try that. If the homeowner wants to sell the home and is eligible for a short sale, the bank will also offer this service. A short sale can keep the foreclosure off the banks books and make the best out of a negative situation for all parties. We have helped many people avoid foreclosure by selling their home through a short sale in Texas.
Short Sale Deficiency Judgment or 1099
When you sell your home through a short sale, the bank is taking a loss on the difference of what you sell it for and what you owe. This “difference”, is called the deficiency and with an approved short sale, your lender can also seek a deficiency judgement for the amount of that difference that was considered a loss. Real Estate Mitigators has a 90% success rate negotiating for full satisfaction including the amount loss and always fights against these judgements. This is something that anyone representing the seller or negotiating a short sale can NOT guarantee as it is always up to the short sale lender or mortgage servicer. On the flip side – if the bank does not issue a deficiency judgement, often times the bank will send the seller a 1099 for the deficiency which could be treated as income. This is not to be taken as legal advice. I recommend you consult a tax attorney regarding the tax implications of a short sale for any legal questions and advice.
Find Short Sale Help!
If you are ready to sell your home in Texas before foreclosure and considering a short sale, why do it alone? You should let the short sale professionals help you through the process. We are licensed Realtors and home buyers with experience working with sellers who are behind on their payments and are looking for options. We are familiar with the required paperwork to make the process move as quickly as possible. Negotiating a short sale takes a lot of time on the phone waiting on hold with the mortgage company, making sure they received documents, finding out what they need next, ordering appraisals, etc.. This is where our expertise comes in to take on all of these tasks for you once we have a contract to purchase your home. We have helped homeowners receive up to $10,000 and avoid foreclosure. The faster you get started the higher chances of closing on your home through a short sale and avoiding foreclosure.
The question is, after knowing all these, is a Short Sale the best option for you? The answer depends on your specific financial situation and your personal wants. For sure though, the bottom line is, it is still best to seek the advice of a professional when looking into these five considerations to know which method is best for you. Give us a call today for a no hassle, no obligation, free consultation at 512-277-5455 or email us at info@realestatemitigators.com or you can even fill out the quick form here.
