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Old 06-13-2011, 08:58 PM
 
60 posts, read 130,015 times
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I recently applied to try and Do a short sale. I have some money in the bank but have no current job. My house has been on the market for two years and no bites. What are the chances the bank approves a short sale?
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Old 06-14-2011, 05:52 AM
 
Location: Lemon Bay, Englewood, FL
3,178 posts, read 5,275,682 times
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All you can do is ask. I'm sure it depends on how far underwater you are. If you owe $500k and the home is now only worth $200k, they may not want to take that big of a hit on it and decide to go through the foreclosure process. I'm sure some of the real estate experts on here will chime in and provide more insight. Good luck
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Old 06-14-2011, 06:30 AM
 
Location: Lakewood Ranch, FL
5,641 posts, read 9,560,292 times
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It is almost always better for a lender to go the short sale route than the forclosure route, no matter the amount of the deficiency. If you have only one loan, it should be fairly straight forward although there can be complications that can cause the process to take longer. I suggest you talk to an attorney who has short sale experience. If this doesn't work out, there are alternatives to short sales and foreclosures. If you haven't already looked into them the attorney can discuss them with you. Also, most attorneys now first try to get the lender to pay the fees and, failing that, the buyer pays (if they agree to it) so talk to them about that.
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Old 06-14-2011, 07:51 AM
 
Location: Punta Gorda and Maryland
6,103 posts, read 14,016,559 times
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Quote:
Originally Posted by SRQGator1 View Post
I recently applied to try and Do a short sale. I have some money in the bank but have no current job. My house has been on the market for two years and no bites. What are the chances the bank approves a short sale?
Sorry to hear you have to go through that!!
Good Luck.
I agree talk to an attorney that deals with short sales. It may cost you a few bucks you don't think you have right now, but in the long run you will be futher ahead, and that is what counts - the predicament your in now, will pass, and the guy that moves forward is you - so work toward that future with that in mind. The you of tomorrow will appreciate the you of today, if you do that. Keep your chin up! You are not the only one that has had to deal with this. The banks and the government's policies are the ones that messed this whole deal up, and you are a casualty.
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Old 06-14-2011, 10:26 AM
 
Location: Port Charlotte, FL
3,979 posts, read 9,529,357 times
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There are no guarantees in a short sale whether the bank will approve the sale or forgive your debt, but short sales offer a better alternative to minimize the downside of facing a foreclosure. The bank could demand payment for their loss. They do not have to forgive the debt. They are able to ask you to pay them back for the difference on the sale and what is owed, but you will need to agree to this. There also may be tax consequences if the bank forgives the debt and will issue a 1099 to the IRS for the amount of the debit forgiven. There can be legal and tax consequences. You may want to consult with an attorney or tax specialist before attempting a short sale When a short sale is done, it is still documented on your credit but won't have the same impact as a foreclosure for most creditors.
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Old 06-14-2011, 11:24 AM
 
Location: Sarasota/ Bradenton - University Pkwy area
3,899 posts, read 5,841,562 times
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Prior to the Mortgage Debt Relief & Emergency Economic Stabalization Act of 2008 going into effect, money forgiven by a lender in a short sale was considered taxable income to the home seller.

However, in many circumstances, the new law no longer requires taxpayers to pay federal income tax on the forgiven debt, provided the property is their principal residence, and the amount of the loan balance was less than $2 million (or $1 million for a single person). The time period for this forgiveness runs through 2012. A tax advisor can help you determine if you meet the requirements.

Someone once told me you will need to submit more information and documents to get out of a mortgage than you had to sign to get into the mortgage. The lender's loss mitigation department (also called asset recovery department) will require the home seller to submit a short-sale application package, either up front or at time an offer is received. You will be required to assemble a list of your assets, your liabilities, supporting financial information (pay stubs, 2 years of tax returns, W-2's, bank statements, etc), a hardship letter by you explaining your situation, a comparative market analysis of the current value of your property by your real estate professional. They will want a copy of the listing agreement and, when you have one, the sales contract. With the sales contract they will want an estimated closing statement showing how much money they will net on the sale. One of the most common reasons why short sales fail is that the package is not complete. Many of the lenders won't call and tell you what is missing, they just set the package aside. Most lenders have set procedures for submitting the short sale package and you must follow those instructions exactly as given.

Because successfully completing a short sale is a complicated process and there can be legal and tax consequences of doing a short sale, I too suggest you consult a real estate attorney that specializes in short sales. There are several such attorneys in town that may fit your needs. Most attorneys who work with short sales do take into consideration the homeowner's current financial difficulties and will work with you.

Some questions you might want to ask the attorney include:
How many short sales have you handled?
How many of those short sales you handled were successful?
You may also want to ask if, in your circumstances, a short sale is your best option, should you take bankruptcy or do a deed in lieu of foreclosure. There is no one right answer that fits everyone's circumstances.
Of course, you will want to ask specific questions regarding the fees that will be charged.

You will also want to find a real estate agent that is competent in handling short sales, that knows what will be required of them by your lender and the attorney, that knows what special addendums will be required for both the listing agreement and sales contract, that knows how to price the property correctly for the market, that knows to document marketing history for your lender, that can assist you through the sales process.

I'm sorry that you're having to go through this process, but with the appropriate help, you can see it through.
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Old 06-15-2011, 07:02 AM
 
Location: Palm Island and North Port
7,511 posts, read 21,312,422 times
Reputation: 2846
Here's a blog I wrote a while back on questions to ask your Realtor when interviewing them for a possible short sale listing: //www.city-data.com/blogs/blog1...r-realtor.html

Here's another post that I wrote back in 2009 explaining how a short sale will effect you and what steps to take to prepare your short sale package:
//www.city-data.com/forum/8817700-post10.html

Here's another I wrote about the difference between short sales and foreclosures:
//www.city-data.com/blogs/blog1...eclosures.html

One of the big things that I stress is to try to get them to write off the deficiency judgment. A skilled attorney and Realtor can help you with this.
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