Frequently asked questions about short sales.
Disclaimer: The answer to these questions has come from our considerable experience of doing short sales since 1991 and are our opinions. We do not give tax or legal advice. If you have tax or legal questions, please consult with your tax person and or your attorney. We work with several attorneys and tax professionals and would be happy to refer you if you would like.
Does a short sale cost me anything? The answer is NO. We never charge the seller to do a short sale. All expenses including commissions are paid by the short sale lender.
Won´t the bank come after me for the difference? The answer is NO. In fact an approved short sale states in writing that they will accept the payment received as payment in full.
Won´t a short sale ruin my credit? The answer is NO. A short sale is much better than a foreclosure, usually resulting in a change to your FICO score of about 50-70 points.
Will I ever be able to buy another home? The answer is YES. Assuming you qualify under normal circumstances, the waiting period is between 1 and 3 years.
Can I do a short sale if I don´t have a hardship? The answer is YES. We have completed many short sales where there is no hardship at all.
Will the bank want all my money if I do a short sale? The answer is NO. We have completed short sales where the seller has money in the bank and a six figure income.
Does the bank care if I own other property? The answer is NO. The banks do not care about other property you own.
Is a short sale better than a foreclosure? The answer is YES. A foreclosure will ruin your credit and prevent you from buying a home for a minimum of 3 years and possibly quite longer.
Will I have to pay taxes on a short sale? The answer is MAYBE. However, there are many loop holes and most of our clients never pay taxes on their short sales.
Is a foreclosure non-taxable? The answer is MAYBE. The truth is, if it is taxable as a short sale, it is taxable as a foreclosure.
Can I prevent the bank from coming after me for a deficiency if I let my property foreclose? The answer is NO. If you have a second loan, you are almost begging the lender to pursue you. It is always better to try and settle the account through a short sale.
Do I have to do any repairs to my property? The answer is NO. Short sales are strictly "AS-IS"
Can I do a short sale on my rental property? The answer is YES. We complete short sales on rental properties all the time. Ask us about our strategies of working with tenants during the sale process.
Would I be better off doing a loan modification? The answer is NO. If you are so upside down in your property that it will take years and years to break even, It is my opinion that no matter what your new loan modification payment is, it does not make sense to keep the property. It's like making the minimum payment on a credit card!
Still have a question or two? Please e-mail us or call us and we will be happy to answer it for you. Call (916) 517-1619 or e-mail us