What is a Short Sale?
A homeowner is ‘short’ when the amount owed on his/her property is higher than current market value. A short sale occurs when a negotiation is entered into with the homeowner’s mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then ‘sold short’ of the total value of the mortgage.
How can I QUALIFY for a Short Sale?
For homeowners to qualify for a short sale, they must fall into all of the following circumstances:
Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
Monthly Income Shortfall – In other words: “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.
How long do I have before I am removed from my home?
This varies by State and can vary on a variety of factors from your mortgage lender. To best understand the foreclosure process in Illinois, check out the following link:
Illinois Legal Aid on Foreclosure Process
What happens to the difference between the purchase price and what I owe on my home?
This is what is referred to as a “deficiency judgment”. Depending on the mortgage lender/investor, this deficiency could be waived!.
How do I know a Realtor specializes in short sales?
Look for National Association of Realtor recognized designations. These include : Certified Distressed Property Expert (CDPE) and Short Sale and Foreclosure Resource (SFR). Our brokerage hosts both designations and can assist you with your options!
As of today, the Mortgage Debt Relief Act has notexpired. However, it is quite possible that Congress will ask homeowners of owner occupied and non-owner occupied properties have to pay income tax on the amount of the mortgage deficiency.
Short Sale Videos
Click “Playlist” in upper left hand corner of video screen to select from a range of informational videos: