If you are looking to make money on real estate, now is the time to consider short sales. It’s a buyers’ market so even if you don’t have experience in buying or investing in real estate, you can profit from the market by renting houses, real estate flipping, or by buying short sales.
The best route to take if you are a first time home buyer is through short sales. Properties offered at short sales are usually those properties that are at risk of being foreclosed. Instead of letting the house enter into foreclosure the mortgage lender will open it for short sale offers.
Here are some important points you need to learn about short sales to help you better understand this route.
- Buying short sales will give you a good value for your money
Short sale properties are usually sold at less than the outstanding value of their mortgage. Mortgage lenders will opt to sell the properties at a value lower than the debt owed rather than let them get into foreclosure, loosing even more money.
- Short sale properties may involve running around mortgage lenders
Unfortunately, mortgage lenders avoid short sales as much as they avoid foreclosures since these would cause them to lose money. This is why they would delay short sales as long as they could. If possible, they will go into an agreement with the borrower to allow him to pay for the difference through a standalone unsecured loan.
Short sale basically means losing money for mortgage lenders so they will try to exhaust all possible options before considering a short sale. They would even accept other short sale offers to see where they would benefit the most.
- When pursuing a short sale, you’ll have to be stern with mortgage lenders
Because some mortgage lenders will be delaying a short sale as long as they could until they’ve exhausted all other possible options, you’ll need to be in constant communication with them so you’ll know what to expect. If it takes them more than two months to make a decision, call them and tell them you can’t wait any longer and that you’ll be expecting an answer in two or three weeks. If not, then you’ll take your offer somewhere else.
- Short sale properties usually experience difficulties in getting proper inspection
Inspections are necessary and highly important in every home purchase. Usually, mortgage lenders allow for the inspection to happen before the final signing. This may work well if there are still occupants at the house. Most often, however, there are no longer occupants in the property at this point. This would mean inability to test electricity and other utilities. To prevent this from happening, schedule an inspection ahead of time. Arrange the schedule with the mortgage lender, your real estate agent, and the current occupants in the property.
- Shore sale properties usually require repairs
Since the previous homeowners could no longer continue paying for their mortgage, they would most likely have little money left to fix some parts of the house. This is why you’ll need to be prepared for potential repairs and maintenance including changing leaking faucet and replacing tiled bathroom floors.
Learn more about short sales by contacting Jerry Pinkas Real Estate Experts!
Jerry Pinkas Real Estate Experts
853 Jason Blvd. Unit G.
Myrtle Beach, SC
Your short sales professionals!
When debt owed on a property exceeds its total cost, sellers usually have two options: making a short sale or having the house foreclosed. While most sellers will choose to walk away and leave the house for foreclosure, others will want to consider making a short sale.
Depending on the condition of the house and the debt owed, a short sale may be a better option than walking away. But, of course, there are also some risks to it. This article will talk about the basics of short sales including its advantages and disadvantages to both seller and buyer.
What’s in a Short Sale for the Seller?
To help you make a decision, listed below are the advantages and disadvantages of short sales.
- Short sales are easy to close. It only takes a couple of months to complete one.
- Missed payments are often avoided in a short sale.
- Sellers who are divorced or have disability or disease automatically qualifies for a short sale. The qualification process is generally faster and simpler for these sellers or homeowners.
- The house is sold as is in a short sale. Sellers are not strictly required to fix the house up or do some renovations.
- Selling the house that has more debt will look better on the seller’s credit than leaving it for foreclosure.
- Some sellers actually qualify for moving money worth $3,000 – $30,000 from their bank when they make a short sale.
- There is no need to pay taxes on forgiven debt as a result of a short sale.
- Depending on the negotiation with the bank and the buyer, the seller may not have to pay for the difference in the total sale price and the remaining debt on the house.
- The seller can live in the house while the short sale process is ongoing, relieving him or her of potential rent payments.
- This type of sale involves a tricky process so one may need to work with a highly skilled professional to ensure it will run smoothly.
- If lenders have not waived deficiency rights, the bank may come after the seller after a short sale.
- Some banks are uncooperative and may reject offers and/or necessary approvals.
There are lots of factors to consider when deciding making a short sale or simply leaving the house for foreclosure. But, for a seller’s best interest, professionals highly suggest considering all potential options first prior to walking away.
What’s in it for a buyer?
A short sale can also be beneficial to buyers. In fact, most buyers especially seasoned property investors and real estate entrepreneurs opt to choose short sales over traditional methods of buying houses.
Here are the advantages and disadvantages for buyers.
- Short sales allow buyers to purchase property at 15% (or more depending on the negotiation with the seller) under standard market value.
- Short sales do not require buyers to pay for earnest down payment even though they are still involved with the property.
- Short sale is a great way for property investors to fill in the pipeline with several offers of inventory without having to close all at the same time.
- In short sales, buyers have strong influence and may control total purchase price and worth negotiation.
- Failure to work with a skilled listing agent may result to bad approvals and eventually foreclosure.
- Because it’s a short sale some banks will require buyers to hold the property for 30-120 days after the sale prior to releasing approval – which may affect the buyer’s profit if he or she is planning to resell the property at once.
- A house offered at short sale may be trashed by the seller. As a result, buyers will not be allowed to negotiate concessions or price drop with the bank.
- Short sales are not the best option for buyers when considering buying houses at wholesale.
Short sales are indeed a great option for homeowners who have more debt on the house than what it’s worth. It has lots of advantages and benefits both to buyers and sellers and may be the best alternative to foreclosure.
On the other hand, to maximize these benefits and ensure that a short sale is a success, it is important to work with a highly skilled real estate professional. Also, it would help if both buyer and seller speak with a real estate attorney first to help clarify some important issues in the sale.
Have you found yourself in a short sale situation? The best advice we can give you is to close as quickly as possible. Even if you are fortunate enough to have a letter of approval from the mortgage holder and the green light to close by a set date, this does not mean that things won’t change. The mortgage company will usually honor the approval agreement if you can close by the specified time, however, circumstances and terms can change which will necessitate getting an extension.
How can an extension affect a short sale?
Let me explain this by way of an example. We recently had a sale where we were allowed almost 60 days to close. This is very unusual since most short sales are allowed only 30 days. The potential buyer was filing for a USDA loan and as with most government transactions, this took longer than the 60 days we were allotted. (As a side note, USDA loans are not a good fit when it comes to short sales.) We just needed a one week extension to close the deal. We were fortunate enough to obtain the extension, however, in the interim the guidelines had changed with the mortgage holder and the closing costs were no longer part of the deal. We went higher up in the organization but in the end we were unable to get the closing costs back into the previously approved deal. The buyer literally had to start the whole underwriting process all over again.
What about a service release?
This is another area that can cause real problems with buyers, seller and agents. A service release is when the mortgage is literally moved from one service provider to another. With some mortgage lenders such as GMAC in bankruptcy their loans are often purchased by another investor or may simply be serviced by another company. The circumstances really don’t matter and it can happen at any time in the Myrtle Beach short sale process. We have seen instances where we are three days from closing and had the file service released. At that point you literally start the process over.
How does the possibility of foreclosure affect short sales?
Common belief in the real estate world is that as long as a home is in short sale the bank won’t foreclose. There is an unwritten rule that a mortgage company would extend the foreclosure date to allow the short sale to close. There has never been a guarantee that the bank would hold off on the foreclosure and there are some new service providers whose goal is to foreclose on the property as quickly as possible. There have been instances where the property was sold in auction in the middle of the short sale process even in instances where there was a solid offer for the property.
So the lesson of this story is if you have a short sale approval from your lender get to the closing table as quickly as possible.
The team at JP Real Estate Experts have years of experience in short sales and foreclosures. We work with local banks and lending institutions to get you to the closing table quickly. Call us today to discuss your options.
Many people today are using the internet to find “hot” deals in the Myrtle Beach short sale market. When you think you have spotted that perfect Myrtle Beach short sale that really interests you, take a minute to step away from the computer and call a Myrtle Beach real estate agent. They can research the sale and make sure it is truly a good buy.
In many instances a short sale will not close and in some markets it is as few as 1 in 10. There are several factors that much take place, including the approval of the lender, before the sale can actually go through.
How is a Myrtle Beach short sale compared?
Most real estate agents will price a short sale below the comparable sales, however, they are in line with pending sales. What is the reason? Short sales will usually take from 3 to 4 months to close. At the time of closing the pending sale will be compared to the comparable sales on the market.
Many Myrtle Beach short sales are priced so ridiculously low that the bank would never accept the sales price. What the seller is looking for is multiple offers. To expect your offer to be accepted by the bank, the offer needs to be close to market value. If you are not in a position to pay more than the lowball listing price, you really should pass.
Research mortgage amounts and number of loans
Ask your Myrtle Beach real estate agent to find out how much is owed and the total number of loans that are on record for the short sale. In these situations a second or third mortgage holder will receive pennies on the dollar compared to the primary mortgage holder.
There are some lending institutions that have a reputation for being difficult to work with. Your agent is aware of these lenders and can give you good advice on how to handle certain mortgage holders.
A good rule of thumb is if your offer is 20 to 30 percent of the amount owed, it is unlikely the mortgage holders will negotiate.
The Myrtle Beach short sale agent’s track record
Be leery of an agent who is hired to market a short sale and has never closed a short sale. Why? It is the responsibility of the listing agent to submit the bid to the mortgage holder and then work to negotiate a price. Your agent cannot talk directly to the bank.
You need to ask yourself if you want to risk losing the purchase of your short sale because the listing agent lacked experience in the short sale arena.
Seller qualifications in a short sale
Request that your agent check with the listing agent for a complete short sale package. A Myrtle Beach short sale package should include:
- Tax returns
- Income verification such as W-2
- Check stubs
- A complete financial statement
- Statements from the bank
- Hardship letter as to why a short sale is needed
You don’t want your short sale delayed because the seller is refusing to cooperate with the bank. You will not be in a position to see these papers but you need to know they have been submitted to the bank.
Myrtle Beach homes that are listed under market value will usually receive many offers. The listing agent is not expected to disclose the exact terms of the offers but you can know who many offers have been received. In many instances the following scenario will take place:
- The Myrtle Beach short sale is listed and the first offer is slightly below the list price.
- The second offer will come in at the actual list price.
- The third offer will be above the list price by a small margin.
- Then the fourth and subsequent offers will be higher.
Your goal should be to be in a position to make an offer that is better than the competition but still below market value or you are wasting your time.
Short sale procedures
Realtors are held to a code of ethics which requires them to treat everyone fairly, however, not every agent is a Realtor. In some instances a short sale agent may make the decision to only submit the first offer to the lending institution.
Withholding these offers is a violation of the relationship between the seller and the listing agent but it does happen. The seller should receive the highest price for their home. Keep in mind that even if your offer is submitted to the lender, you can still lose the sale if another buyer outbids you.
Contact JP Real Estate Agents when you are looking for a good buy on a short sale. They can help you avoid costly mistakes.
854 Jason BlvdMyrtle Beach, SC 29577
If you’ve been around the real estate world at all, or even listened to TV and radio commercials, you’ve probably heard about short sales. They seem to be a big commodity in today’s market, yet many buyers and sellers often wonder what it really means and how the short sale process takes place. Here are some FAQ’s that will answer some of the most common questions.
Exactly What Is A Short Sale?
A short sale happens when a home is sold for less than the existing amount of the loan. If the lender accepts a payoff that is discounted in order to satisfy the debt owed on the loan, then a short sale happens. Almost always, the seller will need to prove that he has fallen on hard times and cannot pay the full amount of the loan.
How Does A Foreclosure Differ From A Short Sale?
The bank owns a foreclosure and has most likely already foreclosed on the property, whereas in a short sale, the property is still owned by a struggling owner who is asking if the lender will be willing to take a discounted payoff of the loan.
Are Short Sales Always Heavily Discounted When Sold?
No. Banks decide the selling price by getting the property appraised. Almost always, the bank will not accept an offer, which is more than 10% below the appraisal value.
Why Do Short Sales Take A Long Time?
During a normal real estate transaction, the deal is closed once the buyer and seller agree to all terms and draw up a contract for the purchase. However, in a short sale, there is a bit of a lengthy process of determining the property’s fair market value, as well as the process that determines if the seller can qualify for a short sale.
Who Pays The Real Estate Agent’s Commission And Seller’s Closing Cost?
This is usually paid by the current lender and includes, commissions, closing costs and any back taxes and liens.
Does The Seller Have To Pay Tax On The Debt That Has Been Forgiven?
It’s important to discuss this with an accountant, but generally the lender will declare a loss to the IRS as bad debt for the deficiency. The borrower will usually receive a 1099 form from the lender representing the income gain that comes from the waiver of indebtedness. It will be necessary for the seller to account for this income. The Mortgage Debt Relief Act of 2007 protects the primary residence of borrowers who are short selling their homes. This happens by allowing much of the reported income to be excluded. Insolvency may be declared on a borrower’s secondary investment property and this would allow the owner to also exclude that income as well.
For more information on Short Sales and how they might affect you, call us today at Jerry Pinkas Real Estate Experts. We have the answers you’re looking for!
Millions of Americans now find themselves in a situation where they owe more on their mortgage than their homes are worth. The years of 2011-2012 have become dubbed as “the years of short sales.” In the first 6 months of 2012 alone, there were almost 39,000 short sales completed by Fannie Mae.
The Federal Housing Finance Agency has very recently announced that there will be new guidelines for mortgage lenders. All programs for short sales will be combined into one program, making it more streamlined. These new rules will let homeowners see much more easily if they qualify for a short sale, and it will allow lenders to have much more flexibility in qualifying people for a short sale.
Highlights Of The New Short Sales Guidelines
Homeowners with mortgages from Freddie Mack or Fannie Mae can do a short sale, even when they are current on their mortgage, as long as they meet the criteria for hardships such as the death of a borrower, divorce, illness or disability or employment transfer.
At closing, homeowners will have the option of making a financial contribution in exchange for not being pursued by the lender for a judgment of deficiency later.
All military personnel who must relocate are eligible for short sale, and under no obligation to financial contribution in order to cover the difference of the sale price of their house and the balance owed.
In previous times, the lenders would often try to negotiate with the homeowner for a higher payment. Under the new guidelines, any subordinate-lien payments must be limited to $6000.00.
Homeowners can receive as much as $3000.00 in relocation assistance in some special circumstances.
Guidelines For Lenders
- According to the FHFA, lenders must:
- Respond to the short sale offer within 30 days
- Provide the borrower with weekly updates
- Give the borrower a final decision within 60 days
This consolidated short sale program has created guidelines that will certainly make it easier and smoother for homeowners who have to face the possibility of short selling their home.
Your Myrtle Beach Short Sales Team
Myrtle Beach short sales used to be regarded as a bit of a no-no to eliminate home mortgage obligations, however today with the housing uncertainty and the present economic challenges, they are once again not only more accepted , but happening more often. There are plenty of property owners who have discovered the exact help they will need to stay in decent position with the financial institution as well as rescue their credit rating by doing a Myrtle Beach short sale. This takes place when property foreclosure is upon you and impending . However before you plunge into it, let’s learn all we can regarding this so that you can make the best and knowledgeable selection before turning to the government for the choice of short sales.
Conventional Myrtle Beach Short Sales
Loan companies tended to be incredibly slow and really reluctant years ago to possibly consent to a short sale as an option to property foreclosure . The main reason was simply because the general thinking was that the damage to the financial institution could be much deeper . But new research is currently showing that the damage to the financial institution may actually be much lower , once the mortgage loan has gone into default, by getting a Myrtle Beach Short Sale solution . Utilizing this new information available , most lenders tend to be prepared to assist their borrowers who have hit financially distressed times.
By using conventional short sales, all of the power of agreement is retained by the financial institution . They will certainly state there is a exact set of requirements that affect this acceptance ; the ultimate decision rests with them. Many lenders need to see the borrower undergo each and every means available to take care of the home mortgage in other ways before agreeing to approve a Myrtle Beach Short Sale. Still , the procedure will take a very long time .
HAFA Myrtle Beach Short Sales
Owners who are really hard pressed with their mortgage loan financial obligation will undoubtedly be relieved to find out that there is additional help from the us government to assist them . In recent years , HAFA was created to assist these homeowners get their short sales approved . HAFA is known as The Home Affordable Foreclosure Alternatives procedure . HAFA criteria standards are not as strict as conventional short sale avenues , but one of the prerequisites is that the property be occupied for the past 12-month period and have a mortgage loan which was secured prior to January 1, 2009. HAFA furthermore makes it necessary that the home be declared underwater, which means that the potential selling value of the home is below what is in fact payable on the mortgage loan . The HAFA program offers guidance and tips to the troubled borrower from the Department of Urban Housing and Development mortgage loan debt counselors . It may also provide guidance in the chance to receive up to $3000 to assist with relocation and also other help needed to secure a mortgage in the future .
Contact us whenever we can help you understand Myrtle Beach short sales better. We’re informed about this and have helped numerous individuals previously to have the peace of mind when looking for this alternative to home foreclosure!
JP Short Sales Team
854 Frontage Road WestMyrtle Beach, SC 29577
In most instances a new residence buyer will start their search by utilizing the internet. Many house consumers in Myrtle Beach are from outside of the area and utilizing the internet makes looking for a home easier. You can use the internet to browse for brand spanking new properties and get a basic feel for an neighborhood.
Even though you can get a general feeling for pricing and the general area, at some point you will need to contact a Myrtle Beach real estate agent. By working with a neighborhood agent that is aware of the locale you will be kept up to date of any new home sales, potential construction plans for the immediate area and other data that might be difficult to trace from a distance. A respectable agent may show you where to discover a virtual tour of a possible new house before you consume precious fuel searching for your dream home.
Is Your Real Estate Agent Internet Knowledable?
When you might be looking for a Myrtle Beach real estate agent you’ll want to be certain they know how you can make the most of the online world. If they know the right way to totally make the most of the internet, they can help you with narrowing down the precise residential home right from the comfort of your recliner.
With this in mind it would be best to make sure and question them if they are accustomed to the online world. Ask them what methodology of communication they prefer. If they don’t have e-mail as part of their reply, you may need to think twice prior to making a contract with them. Another good approach to choose their web savvy is to have them show you a digital tour of a few homes. Be very specific in stating what you’re looking for and look to see in the event that they find a house or two that embody your desires.
Check the profiles online of Real Estate Agent. Does their profile state the particulars of how they utilize the internet to assist their buyers to search out the house they are seeking? If so, then this is most likely an buyer’s agent that keeps up with the market traits and could have loads of details right at their fingertips.
A good Myrtle Beach real estate agent will make the time to repeatedly hone their expertise with courses, on-line lessons and webinars. These courses usually entail on-line advertising, working with specific age demographics similar to retirees or first time home buyers. Always ask the agent during the interview what courses they have participated in lately.
You will need to inquire as to the variety of sales that a real estate organization has had within the last few months and the way they completed this. Ask about references on these house gross sales and then you should definitely contact the home homeowners and ask them about their home buying process with the agent.
To verify that your agent has good negotiating and communication skills you will want to see if they’re actually listening to your desires. Recently a married couple came to our agency who have been fed-up with the buyer’s agent they had been working with because that real estate agent solely listened to their pricing requirements and paid no consideration to their different desires. This couple did not stay in this area and had little or no time to make a choice. The real estate agent may have saved plenty of time by asking the pair to evaluation listings on-line after which thinning down the actual houses they would tour prior to their arrival in Myrtle Beach.
If saving time, frustration and money sounds good to you, then you wish to find a Myrtle Beach real estate agent that can listen to what you need and use the techniocal tools we have now available to seek out for you the perfect home.
At JP Real Estate Team we take satisfaction in being web knowledable. You can trust us to use probably the most fashionable means to find your dream residential home. Click right here Myrtle Beach Real Estate Agents to be put on our watch listing for homes that match your particular wants.
Many people ask us “Why do I need a real estate agent when I could save thousands of dollars selling my Myrtle Beach home myself?” This is one of the most important decisions you will make in your life and a good real estate agent will be your guide.
How Do I Know That A Real Estate Agent Will Work In My Best Interest?
Being in a position that you need to short sell your home is frustrating and stressful. Some of the questions you may be ask yourself are:
- How do I know that a real estate agent is really working for me?
- Is the agent going to be too busy for me?
- Does the real estate agent have integrity?
- Is the agent going to spend as much effort on the sale of my home that I would expend if I was doing this myself?
One of the most important aspects of your sale is making sure that you are comfortable with the real estate agent you select to represent you. You want to feel so comfortable that you will be able to say “no” when an offer isn’t just right.
You don’t need a real estate agent that is intimidating but at the same time you need a business person with a good attitude. One that is assertive and professional in their dealings with you and other agents.
Think of choosing a real estate agent at this critical time in the same way you would choose a doctor or lawyer during a time of crisis. You want a professional that has the best outcome for you in mind.
The interview process for a real estate agent is about finding an agent that is familiar with your neighborhood, fully understands the short sale process and most importantly, someone that makes you feel comfortable. Most agents will do a presentation for you when you ask them for an interview. This is a business procedure and often times an agent will click into presentation mode immediately.
You will want to get passed this rehearsed presentation and get to know the person. You want to feel that they understand your wants and needs before you conclude the interview. Most agents will think about their reputations and therefore have integrity. But you want to make sure that the sale of your home as quickly as possible is not their only objective.
Ask About A The Sales Record Of The Real Estate Agent
Even in a down economy there are agents that have outstanding sales records. You will want to ask about their sales history. Most agents won’t mind giving you a few of their recent sales with references that you can check. Call of few of the references and ask how the agent handle the sale and the homeowner involved in the sale.
Don’t hesitate to ask questions. How long was the home on the market? How many times as the price of the home reduced and why? Was the home listed as a short sale? Did the agent seem to know how to handle a short sale?
A few of the other questions you should be asking a real estate agent are: Did the real estate agent have a marketing plan for the sale of the house? Was the plan followed during the listing period? What courses has the agent taken that qualifies them to handle a distressed sale?
Listen closely to the agent’s tone of voice. Are they talking in a disinterested monotone? Do you find their voice to be relaxing? Do they sound excited about your listing? Each person is more comfortable with a different tone of voice. Make sure that you are satisfied with how you are treated during the interview.
Ask questions that will help you gauge the agent’s negotiating skills. Discuss commission and the bottom line selling price for your home. You need to feel comfortable discussing with your real estate agent. One way to judge these skills is to try and negotiate a lower commission rate and see how the agent explains their response. If the agent can convince you their rate is fair and that they will work hard to earn the stated rate, then they will be able to convince someone else to listen to their viewpoint then they are negotiating for you.
All of these questions and the time taken for a good interview will give you the ability to judge if the real estate agent is the right person for you. When you are in a short sale situation, you need to choose someone you can trust and is going to work hard for you.
At JP Real Estate Experts we work as a team. You can rest assured you are in the hands of real estate agents with experience and who care about you and your home.
Jerry Pinkas Real Estate Team
854 Frontage Road West, Myrtle Beach, SC 29577
We want to be your real estate agent of choice!
So many families in the Myrtle Beach have faced situations over the last few years where it is better to cut your losses and get out of Dodge. We all invest a lot of ourselves in our homes and the loss of a home can be devastating. This is the reason that many home owners wait until it is almost too late when deciding to sell. If you are considering downsizing due to out-of-control costs or if you are in a position where you have to sell your home, you will want to be sure and enlist the help of a Myrtle Beach Real Estate agent. Look for an agent who has experience in short sales and can sympathize with your situation.
If your Myrtle Beach home is currently worth less than what you owe the mortgage company, then a Myrtle Beach real estate agent will be familiar with all the procedures and red tape and will be in a position to guide you through the many aspects of negotiating a short sale. You have probably heard the term “short sale” many times. It simply refers to the situation where the current Myrtle Beach market value of your property is less than what you owe – causing a sale that is “short” of what you owe.
Due to past financial practices in the banking industry, most of the housing market in the United States has suffered a drastic decrease in the value of existing homes. Fortunately, most of these practices have been rectified and the industry is reporting a light at the end of the tunnel so to speak. Existing home sales have increased and the inventory of homes is on the decline.
Many home owners are not in a position to take advantage of the lowest interest rates in recent mortgage history. Combine that with the increase in food and gas prices and it is impossible to stay within your budget and keep your current home. If you are considering a short sale, you need to understand that this is different than selling your home under normal circumstances.
Differences Between a Myrtle Beach Short Sale and a Conventional Sale
In many instances with a conventional sale, the mortgage holder won’t even know the home is on the market until they lawyer calls for a pay off balance on the mortgage. With a short sale, the mortgage company has to be in on the sale from the beginning. There is also considerable more paperwork with a short sale than a conventional sale and this is where a Myrtle Beach real estate agent can be a big asset.
The first thing you must do in a short sale is give your mortgage holder permission, in writing, to communicate with your Myrtle Beach real estate agent. Next you will need to document all of the reasons you can no longer pay the monthly mortgage on your home. This is referred to as “proving hardship” and you will need to include bank statements, proof of income such as W-2’s, credit card and other bills.
Keep in mind that the statement of hardship does not relieve you the homeowner of the responsibility for the debt. It is up to the lender to determine if they will absolve any remaining balance. Your attorney can ask the mortgage holder to “forgive” the balance. Many lenders will accept a short sale as an alternative to foreclosure to avoid having yet another home on their inventory and avoid the expense associated with a foreclosure.
Many homeowners don’t realize that if a mortgage company has too many foreclosed homes on their books they can jeopardize any future loans from being insured. This is a huge incentive for the bank to cooperate with a short sale.
Even if the debt is “forgiven” a short sale will still affect your credit rating. However, the hit to your credit is usually not as great as a foreclosure. The mortgage company is required to issue a 1099 for the amount “forgiven.” This may cause an adverse affect on your tax return. Currently, the federal government is not taxing the difference, however, this could change by the end of 2012 when the law expires.
As with other areas in your life, compromise and patience will go a long way when working with your lender on a short sale. This type of sale usually takes considerably longer than a conventional sale and finding a buyer that is also patient can be difficult. By working with a Myrtle Beach real estate agent, you can drastically cut down on the length of time this takes.
Here is what one of our customers had to say:
“Jerry and his team did a fantastic job of short selling our condo for us. We had an offer is less than 2 months and the process with the bank went flawlessly. Everything they said they’d do, they did. We’d like to sincerely thank Jerry and his team for all they did for us and helping us to move forward. We would highly recommend him and his team without any hesitation.” Dave & Ruth Buell
We would love to be our Myrtle Beach Real Estate Agent of choice! We can help.
Jerry Pinkas Real Estate Team
854 Frontage Road West, Myrtle Beach, SC 29577