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Welcome Home to Advantage!
Pre- Foreclosure Short Sales - Frequently Asked Questions
- My property is not listed. How do I start the Short Sale process?
If you want to sell your property because you can no longer afford the payments contact your local Realtor about listing your property for sale on the local MLS. If you want to keep your property but are unaware of the current options or whether you may qualify for a loan modification, ask your Lender more about retention options.
- My property has been listed for months but it is not selling.
Discuss the pricing with your Realtor to ensure the property is listed at a competitive price within the fair market value range for the area. You and/or your Realtor may contact a Loss Mitigation specialist to review options if your property is not selling.
- My property is listed but I want to keep it. How do I know if I qualify for a Modification?
If you want to keep your property and have not applied for a Modification, contact your Lender to learn more about home retention options.
- I have an offer on my property. What should I do?
If you have received an offer on your property please fax all required documentation listed below to submit your request.
- What documentation will I need to submit with my Short Sale request?
1. Written explanation of Hardship
2. Financial Documentation including:
· A signed copy of the most recent federal income tax return including, all schedules and forms.
· Copies of the two most recent pay stubs indicating year-to-date earnings.
· If Self Employed: 4 months of the most recent (consecutive) bank statements.
3. Executed Listing Agreement
4. Detailed Listing History (MLS Printout)
5. Estimated Closing Statement (HUD-1 form)
6. Executed Purchase Contract (Signed Offer)
7. 3rd Party Authorization - Authorization signed by the customer to allow the Realtor or designee to discuss the account with the Lender, if desired.
How do I submit the required documentation?
Depending on where your loan originated, your short sale specialist will submit it for you.
- How long does the process take?
Once all required documentation is submitted a decision is typically completed within 30 days. Common reasons decisions may be delayed include low offers under fair market value and junior liens held by other banks or individuals that also need to agree to a short sale. Depending on the type of loan, an investor and/or insurer may also need to approve the sale.
- Will I have any tax liabilities?
Consult your tax advisor to see if you will incur any tax liabilities as a result of the short sale.
- How will a Short Sale affect my credit?
The completion of a Short Sale may affect your credit rating. The final disposition of a completed Short Sale may report as "Account paid in full for less than the full balance".
- Does the Lender charge a fee for the completion of a Short Sale?
No, the Lender does not charge a fee for processing or completing a Short Sale.
- I signed up with a Short Sale negotiation service. Will the Lender pay their fee?
No, the Lender will not pay any 3rd party Short Sale negotiation or processing fee nor allow this type of fee to be deducted from the proceeds of the sale of the property.
- Will I be required to pay back the amount of the shortage or the deficiency balance?
The approval letter will specify the terms of the Short Sale approval. Your Loss Mitigation specialist will be able to explain whether the deficiency balance will still be owed.
- My loan is in Foreclosure. Can I still be considered for a Short Sale?
Yes, however without a written Forbearance agreement the Foreclosure may continue during the process. Please contact your Loss Mitigation specialist for more information.
- My loan is current. Can I still be considered for a Short Sale?
Yes, however the required financial documentation must be submitted along with a detailed Hardship letter explaining the inability to continue to maintain your loan payments and reason behind the Short Sale request.
- I have two loans. Can I still be considered for a Short Sale?
Yes, however if the 2nd loan is with another bank they will need to approve the Short Sale separately.
- My property is a rental. Can I still be considered for a Short Sale?
Yes, however you must include rental income documentation, which may include bank statements, rental agreements or an explanation letter if rents are not being generated.
- Do property taxes need to be paid during the Short Sale process?
Yes, if your property taxes are not escrowed as part of your loan payment and they become due they should be paid.
- I filed Bankruptcy. Can I still be considered for a Short Sale?
Yes, however consult your Bankruptcy attorney regarding the process of selling your property during a Bankruptcy.
- I want to sign my property back to the Lender. I have heard this is possible through a Deed in Lieu of Foreclosure. Is this an option?
This may be an option however it is recommended the Short Sale option is reviewed first. Please contact your Loss Mitigation specialist for more information.
$8,000 First-time Home Buyer Tax Credit at a Glance
- The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
- The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
- The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
- The tax credit applies only to homes priced at $800,000 or less.
- The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
- For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.
- For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance
- To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
- The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
- The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.
- The tax credit applies only to homes priced at $800,000 or less.
- The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.
- Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
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