Luxury Short Sales Explained

1. Can my real estate agent explain the short sale process to me?

Answer: The Maryland Short Sale Team is a group of qualified short-sale real estate specialists. We can clearly and logically help evaluate your situation, explain in detail the short-sale process, and create a strategy.

2. How do I know if my property will qualify for a Short Sale?

Answer: The Maryland Short Sale Team knows the specific guidelines and understands the short sale process so that your property can be accurately evaluated to address your specific situation.

3. Does my real estate agent know what information I will need to provide to the lending institution?

Answer: The Maryland Short Sale Team will be able to ask the right questions and provide you with the appropriate paperwork to begin the process of creating a short sale package for the lending institution to review your current financial situation.

4. Does my real estate agent know what “hardship” categories qualify me as a short-sale candidate with the lending institution?

Answer: There are very specific categories that lenders consider as “qualified hardships.” The Maryland Short Sale Team will be able to review your situation and inform you of the different types of hardships that most lenders consider “acceptable.”

5. Does my real estate agent know how to create an effective short-sale strategy?

Answer: A short sale will only be accepted by the lending institution if both your property and you meet the lending institution’s guidelines. With the knowledge and expertise of The Maryland Short Sale Team, every effort will by made to ensure that you have all of the necessary elements documented to qualify for and complete a short sale.

6. Does my real estate agent have prior experience and specialize in working with home owners and lending institutions to create a short-sale transaction?

Answer: This type of transaction has become a real estate niche. The Maryland Short Sale Team has specialized knowledge and understands the systems required to be successful. As REO Specialists we deal with banks, loan servicers and asset managers on a daily basis. You can be sure that you’ve selected a firm with previous experience and expertise.

7. Does my real estate agent know how to market my home, since timing is essential?

Answer: The Maryland Short Sale Team has specialized tools for selling your home, including the MLS (Multiple Listing Service), customized websites, bus tours and caravans, open houses, market flyers and brochures. Again, because timing is so crucial, we know about advanced technological services and know how to apply them to the sale of your home. Our specialty advertising includes: toll-free hotlines, fax-on-demand marketing, and 24-hour access to information on your home.

8. Does my real estate agent know how to price my home?

Answer: The Maryland Short Sale Team understands the current market conditions and how the market is affecting home sale prices. We will be able to back up our assertions with solid proof by obtaining a comparative market analysis to include three items: the listing and selling prices of homes in your area, a description of comparable homes, and the length of time the homes have been on the market. This gathered information will give you confidence that your home’s proposed market value is set at an accurate pricing range.

9. Does your real estate agent have a pricing/marketing campaign for 14, 30, and 45-days?

Answer: If your home isn’t seeing much interest by prospective buyers after 14 days, The Maryland Short Sale Team will promptly be able to provide you with a list of things being done on a regular basis to generate activity. We will provide you with a "Weekly Status Gram" communication vs. you having to continually request updates and make suggestions as to how to sell your home. The Maryland Home Team has the professionalism and expertise in the short sale market.

10. How do I know if I am really comfortable with the real estate agent I am selecting?

Answer: This is a great question to ask yourself. We have all had times where we went along with a decision because of pressure but knew it wasn’t the right choice. Ask yourself if you trust The Maryland Short Sale Team and more importantly, if you feel confident in the way we conduct business. We are happy to provide references so that you can be educated with our skill level and expertise in selling your home as a short sale. You are dealing with a very emotional issue…selling your home. Make sure you are making good business decisions during this trying time. If you decide what we have to offer is not for you, then we'll walk away with no pressure. Fair enough?

What Is A Short Sale?

A short sale occurs when the net proceeds from the sale of a home are not enough to cover the sellers’ mortgage obligations and closing costs, such as property taxes, transfer taxes, and the real estate agent’s commission. A short sale is an alternative to foreclosure which may benefit both lender and borrower alike. The lender is getting paid back much of the money which it lent to the borrower as well as getting rid of the property. The borrower is getting out of their mortgage without having to go through foreclosure proceedings or expend any more money towards the home. Typically, the lender pays practically all sales costs, including repairs, escrow and title fees and realtor commissions.

How Do I Know If A Short Sale On My Property Is Right For Me?

Because of the current market conditions, mortgage lenders are more willing to work with borrowers faced with a financial hardship by agreeing to the short sale process. If you are faced with a hardship and are unable to meet your financial obligation on your mortgage, your lender would prefer to settle the matter with you as opposed to taking the property through the foreclosure process.

If I Do A Short Sale, What Do I Have To Pay To Sell My Home?

In most cases, you will pay literally no sales costs if your lender approves the Short Sale. The agent commissions, title and escrow fees, and even most repair expenses are paid by the lender as part of the Short Sale approval. In most cases, the amount the lender reduces the sellers’ payoff is considered to be “forgiveness of debt.” This amount is normally taxable. Only a tax professional can make this determination, but expect to receive a 1099 on the amount forgiven by the lender as income for you to be taxed on for the year in which you closed the property.

How Do I Get Started On The Short Sale Process

There are very specific categories that lenders consider “qualified hardships.” A short sale can only take place if both your property and you qualify . You will need to make sure you are working with an experienced short-sale transaction management team so that you will increase the odds of having your lender accept the proposed short sale with your first request. Not all lenders will accept a short sale. Experienced negotiation is the key.

What “Hardship” Is Acceptable For A Lender?

Below you will find a list of “hardships” that are frequently accepted by mortgage lenders:

1. Job relocation

2. Unemployment

3. Significant income loss

4. Divorce

5. Separation

6. Excessive medical bills

7. Death of spouse

8. Death of a family member

9. Business failure

10. Damage to property

11. Incarceration

12. Military service

13. Adjustment in mortgage payment or unforeseen increase in living expenses

Most mortgage companies or lenders require the hardship letter pursuant to a short sale. In the hardship letter, it is important to present the facts clearly, and above all else, be honest. The hardship letter must be able to prove the situation that caused you to fall behind on your payments and the excuse for falling behind must be legitimate and provable. A hardship is defined real and the mortgage company believes the loan is likely to become delinquent.

Do My Mortgage Payments Need To Delinquent?

Most lenders will turn down your request for a short sale if the seller is currently making the payments. The only time they will consider it a short sale, is when the seller’s payments are delinquent. This presents a particularly difficult dilemma for the seller. Sellers who keep their payments current are protecting their credit rating, but the lenders require delinquency to do a short sale transaction.

I Have Two Loans; Can I Still Do A Short Sale Transaction?

Yes. We will have to work with both lenders to put together a Short Sale transaction packet. Most sellers in this situation are usually successful at getting the two lenders to cooperate because neither lender wants to own another home through foreclosure.

I Am Concerned About My Credit-How Will A Short Sale Effect My Credit?

Late payments leading up to a Short Sale will negatively impact your credit. Much depends on how the lender reports the Short Sale to credit rating agencies such as Experian. However, if your bank accepts a Short Sale and does not negatively report, the short sale will not in itself negatively impact your credit score. For sellers, the key advantage to selling in a short sale is avoiding foreclosure. A short sale does less damage to a person's credit report than a foreclosure. It’s also less detrimental than a “deed in lieu” (of foreclosure), in which a borrower gives the lender the keys to the house and stops paying the loan.

List of Required Documentation For A Short Sale

In order to complete a Short Sale request, your lender will typically ask you to complete a Hardship Package that will need the following included in it:

•A Hardship Letter explaining cause of current financial situation.

•Financial information (Monthly Financial Statement).

•Last 2 years federal tax returns.

•W-2’s

•Last two months’ pay stubs.

•Last two months’ bank statements.

•If there is more than one mortgage or line of credit connected to this house, they will need

information on all the mortgages.

•If you are in Chapter 7 or Chapter 13 Bankruptcy Proceedings, a letter from the Federal

Bankruptcy Trustee allowing the sale of the property is Mandatory. If you are discharged under

Chapter 7 liquidation proceedings, a copy of the Discharge letter is mandatory.

There are solutions to avoid letting your house fall into foreclosure.

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There are solutions to avoid letting your house fall into foreclosure.

Complete this form to Download your Report

Complete this form to
Download your Report