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Short sale FAQ'sBookmark and Share

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Short sale FAQ's

Q. What is a short sale?
A. A short sale is when a property is sold below what is owed on the mortgage.

Q. Should I pay an up front fee to short sale?
A. No.

Q. Why would the mortgage company agree to accept less than what is owed?
A. If the borrower can no longer afford the mortgage and the only option is foreclosure or short sale, banks generally believe it makes more sense to allow homeowners to short sale the property for today's value. The foreclosure process is costly and time consuming and the banks usually wind up making less money in the end after taking that route.

Q. Do banks approve all short sales?
A. Every situation is different. The seller must go through an approval process which generally includes verifying some kind of hardship and or that the seller can no longer afford the mortgage. The contract also goes through an approval process generally the bank orders an appraisal or value on the property and determines whether or not the contract sales price is acceptable to them. Many short sales are not approved, however virtually every short sale that Sloan Properties has negotiated has been approved!

Q. If I am current in my mortgage will I be able to short sale?
A. Yes, there is a chance, however many banks will not negotiate with current clients.

Q. What are the most common reasons for a short sale?
A. Loss of job or a reduction in pay causing the homeowner to be unable to pay or afford the mortgage. Investor's that owe more than what the property is worth and unable to rent to cover the mortgage payment. Illness and death are also common reasons for short sale.

Q. Can I still short sale if I received a foreclosure notice?
A. Yes

Q. How does the seller benefits from a short sale?
A. A seller benefits from a short sale in three ways, 1.) The credit, if the alternative is foreclosure then a short sale will allow the seller to be able to obtain financing if needed in the future in as little as two years as opposed to a foreclosure which can be 5 to 7 years. 2.) A short sale in most cases legitimately releases the seller from the debt that they can no longer pay. 3.) A short sale enables the seller to remain in control of the sale of their home and show's future creditors that during an epidemic you chose to do the right thing with your property that you could no longer afford.

Q. Who pays back property taxes or HOA fees in a short sale?
A. Typically The bank that has a approved the short sale pays all closing cost associated with the sale including property taxes and HOA fees.

Q. If I have two or more mortgages can I still short sale?
A. Yes, each mortgage will need to be negotiated individually.

Q. Who pays the real estate commission in a short sale?
A. Typically the bank who has approved a short sale pays all closing costs associated with a sale including real estate commission.

Q. Does the buyer need to qualify for the short sale?
A. No, the buyer will only need to prove they can achieve financing to purchase the property and the contract terms and price must be acceptable. The exception is that the banks approving the short sale often refuse to sell the property to a relative or agent of the former owner.

Q. If my home needs repairs can I still short sale?
A. Yes, any property whether mint condition or in need of repairs may be short sold.

Q. Can an investor or investment property qualify for a short sale?
A. Yes, all short sales are on a case by case basis and as long as there is a hardship or the inability to pay the mortgage then the property may qualify for a short sale.

Q. Does a buyer benefit from a short sale?
A. Yes, often times short sales are priced below market value and or sold below market value. Banks will typically take less than the appraised value because of the time involved in the short sale process for the buyer.

Q. If I do a short sale how much will I have to pay to sell my home?
A. You should not have to pay any money to sell your home and never pay up front fees to anyone to short sale your home. Contact Sloan Properties to short sale, we get paid when the home closes and we negotiate all the closing cost fees with the bank.

Q. Do I need to hire a real estate agent to short sale?
A. By hiring a real estate agent who is experienced in short sales will likely ensure the job gets done. Often times short sales wind up as a foreclosure due to lack of experience.

Q. How does my real estate agent get paid in a short sale?
A. Typically the bank that has approved the short sale pays all selling costs associated with the sale including real estate commission.

Q. Will the bank ask me to sign a note?
A. It is possible that the bank may ask if the seller would agree to sign a note depending on their income and hardship.

Q. Are short sales priced below market value?
A. Because short sales are individual homeowners there is no telling how they or their agents may price the home but typically in order to sell a short sale they are priced below market value.

Q. Has Sloan Properties ever had a short sale that was not approved?
A. We have a *98% close ratio on all of our short sales! In order to maintain 98% success rate at Sloan Properties we pre approve our sellers to determine their hardship. Call us now to talk to a pro if you think you want to short sale.

Q. Can I short sale if I have 3 mortgages?
A. Yes

Q. Will I have closing cost to sell short sale?
A. No, unless otherwise negotiated up front with bank, seller should not bring money to closing or make money at closing.

Sloan Properties does not offer tax or legal advise. We are REALTORS® who represent sellers in the marketing and sale of their property.
*Past performance is not a guarantee of future results.

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