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Questions and Answers about Short Sales
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Get information about short sales at my workshop at JP Morgan Chase at 6211 Cadieux in Detroit from 6-8 pm.
Q. What is a short sale?
A. “A short sale is when the homeowner sells their home for less than what is owed on their loan, and the lender accepts that amount as payment in full,” (Source: An Agent’s Guide to Short Sales, Foreclosures, and REOs, p. 11). If you decide to purchase a home for short sale, you want to make sure your Realtor® has experience with short sales.
Q. If I don’t have an economic hardship, can I still sell my house as a short sale?
A. No, the bank will require quite a bit of financial information for you to prove that you have an economic hardship. Voluntarily retiring or quitting a job is not an economic hardship. If not, consider leasing your home out or a lease with an option to buy.
Q. If I sell my home as short sale, will it affect my credit?
A. Yes, selling your home as a short sale will affect your credit, but not as much as a foreclosure. A short sale can save a several hundred hit to your credit.
Q. Can I profit from a short sale?
A. No, the seller cannot walk away with any money from a short sale.
Q. Will the forgiven debt on my mortgage be reported as income?
A. Before December 2007, the debt was considered income and the lender sent the seller a 1099. In December 2007, President Bush signed a three-year temporary tax break for sellers who complete a short sale. Through 2010, the IRS will not treat the forgiven debt as income (Source: An Agent’s Guide to Short Sales, Foreclosures, and REOs, p. 34).
Q. How can I sell my home as a short sale?
A. Contact meat 248.346.5068 for a formal market analysis and listing presentation.
Q. Why should I buy a home short sale?
A. A short sale should give you an opportunity to sell your home for below market value with instant equity. Contact me at 248.346.5068 for a market analysis to make sure you are getting a good deal.
Q. What are the possible drawbacks to purchasing a home short sale?
A. Instead of just having the sellers sign a purchase agreement, the bank or lending institution must also agree to the terms of the purchase agreement. It usually takes much longer for the bank to respond than private sellers. Buyers need to be really patient.
Q. Can a bank turn down a short sale offer?
A. Yes. There are six common reasons why a bank can turn down a short sale offer. Contact me at 248.346.5068 for more information. If you work with a Realtor® who has experience with short sales, you will be in a much better position to sell your home as a short sale.
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Posted - 07/14/2008
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