1. What is a short sale?

 

A short sale is a real estate transaction where the homeowner sells their property for less than the amount owed on the mortgage. This is typically done when the homeowner is facing financial hardship and cannot afford to continue making mortgage payments.

 

 

2. How does a short sale work?

 

In a short sale, the homeowner must first contact their lender and provide documentation of their financial hardship. The lender will then assess the homeowner's situation and determine if they qualify for a short sale. If approved, the homeowner can list their property for sale and accept offers. Once an offer is received, it must be submitted to the lender for approval. If the lender agrees to the sale, the homeowner can proceed with closing the transaction.

 

 

3. What are the benefits of a short sale?

 

One of the main benefits of a short sale is that it allows the homeowner to avoid foreclosure, which can have severe consequences on their credit. Additionally, a short sale may allow the homeowner to negotiate the forgiveness of any remaining mortgage debt, relieving them of the financial burden.

 

 

4. What are the potential drawbacks of a short sale?

 

While a short sale can be a viable option for homeowners in financial distress, there are some potential drawbacks to consider. For example, the homeowner may still be responsible for paying taxes on any forgiven debt, and the short sale process can be lengthy and complex. Additionally, the homeowner may not have control over the final sale price, as it is subject to the lender's approval.

 

 

5. How does a short sale affect credit?

 

While a short sale can have a negative impact on a homeowner's credit, it is generally less damaging than a foreclosure. The exact impact will depend on the individual's credit history and the specific circumstances of the short sale. It is important to note that a short sale will remain on the homeowner's credit report for several years.

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6. Can I still do a short sale after a bankruptcy? 

We always recommending processing a short sale before filing a bankruptcy but YES you can apply for a short sale after a bankruptcy proceeding. 

 

7. Can I receive any compensation from a short sale? 

Yes, banks know that you are dealing with a difficult financial situation and banks offer relocation monies to people process a short sale.