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Can I Short Sale if I am already being foreclosed on?

Yes, a foreclosure means the lender is planning to take action due to a delinquency. However, time it tight. We need begin the short sale, that’s means get it listed so the lender knows you are trying to avoid foreclosure.

Under Contract – Buyers

The contract states ‘time is of the essence’. That means we need to comply with specific time frames associated with the next stages of the purchase process. Besides your attorney and lender we need a Home Inspector on our team.

  • You are entitled to have a professional home inspector review the property with you. Do not waive this opportunity or let it slip by. Schedule the inspection right away. Realstar always recommends using a licensed, ASHI approved inspector. Read Why you want an Inspection. Look for a list of your Agent’s recommendations at Agent Recommendations.
  • Always consider further opportunities for discovery of other potential problems, most specifically Radon. You may also want to consider tests for lead based paint, mold and more.
  • You need to attend the inspection. Find a couple times that fits both your schedule and the inspectors then call your agent to arrange one of those times with the Seller. Home Inspectors get paid at the inspection so bring your checkbook.
  • Most inspections take 2-3 hours. We do not recommend bringing children, family or friends as they frustrate inspectors trying to work. It is not yours yet so be respectful of the property and it’s contents.
  • Bring a notepad, tape measure and a camera to help with your decorating ideas. Home Inspectors are professionals. Feel free to ask them questions but, also give them space to focus on the task at hand. They will usually spend time at the end summarizing what they find. You will also get a report sent to you.
  • Discuss the inspection results with your attorney and your Agent. Determine which issues are important (ie life safety such as electrical problems). Keep in mind no property is perfect. See ‘Inspection Notes’ below.
  • Do not be afraid of things like ‘elevated’ radon. There are numerous and very effective ways to remediate to safe levels. Remediation is a cost usually borne by the seller and often includes a re-test showing the success of the remediation.
  • Make sure you make a loan application with your lender within seven(7) business days (most contracts require it) or you could risk default. Whether you sit face to face or apply over the phone have your lender send an email to all parties stating your application is being processed.
  • Once you apply for the loan your lender will contact the seller’s agent to complete the appraisal.
  • Make sure you discuss where all your money is coming from for closing. Keep in mind lenders do not like to see money move around accounts without documentation.
  • Closing dates usually do not change so plan on closing the date indicted in the contract.
  • It is important to contact your lender every week. Make sure they do not forget about you or are waiting for documents from you. Interest rates are rising. A delay in the closing could mean paying a higher interest rate.

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Who pays the Realtor Commission?

Your lender pays all Realtor commissions.

Who pays the Attorney, Title Company, Transfer Fees, etc.?

Your lender pays these fees too plus all traditional seller fees and costs. Nobody earns anything unless we successfully complete your short sale. The Attorneys and Title Companies we work with will NEVER charge you. Even if the property doesn’t sell.

Can I stay in my house until the sale is completed?

Once under contract it can take several months for lender approval and for the sale to be completed. You can stay up to the day of closing. Though, we suggest you move out the day before.

Will a Short Sale affect my credit?

A short sale will affect the credit but, not nearly as much as a foreclosure would. You may be able to purchase again in some instances in as little as 12 months after the short sale.

How much work will I have to do?

Not much at all. We will ask you to gather some basic financial information. From there, we and the Attorneys we work with will handle all the negotiations with your lender. You will need to allow showings whenever a Realtor asks.

Why would my lender go for a Short Sale?

The Foreclosure process is very costly. A Foreclosure recovers about 50% of value vs. a Short Sale which recovers around 80% of value. With a Short Sale the lender is usually better off financially. Besides, the lender does not want your property. They are in the business to lend money not manage real estate.

So what does this cost me to short sell?

Not much. The Short Sale process is still less expensive for the lender than a Foreclosure. As such, the lender covers every expense except the moving truck. This includes costs for your Attorney, Title, Realtor, Closing Costs, Transfer Fees and more. See our No Cost Guarantee.

Can I stay in my house until the sale is completed?

Absolutely. It can take several months for lender approval and for the transaction to be completed. You can stay up to the hour of closing.

Why do I need a Short Sale Expert?

You need help and guidance from someone who understands the difficult choices you are making about your home. We have helped many clients sell their home as a Short Sale and we have a successful track record with literally dozens of lenders.

Will this completely stop the foreclosure process?

Most lenders won’t completely stop the process but many will ‘slow’ the process to give time for the short sale to close. The important thing here is to 1) get it listed as a short sale to show you are trying to sell, 2) Get you hooked up with one of our attorneys to stop your lender from harassing you while we short sale and 3) Get the property under contract so the lender pauses the foreclosure sale.

Ok, sounds good. How do I get going?

It’s Simple. Contact Realstar Realty immediately. From the time we sit down with you to the time your home is on the market and your stress level drops – can be just a few days from now.

“My rate adjusted just as my income changed. My lender wouldn’t help me. John and Dianne spent so much time dealing with my lender. I was able to walk away from my mortgage debt and start fresh. I am grateful for their help and compassion.”

– Carolyn R.

Disclaimer: The information provided here is for general information purposes only. Contact legal consul for advice on your specific situation. No information provided here shall be construed as legal or any other advice. No representation is made to the completeness or accuracy of the information. As such, no part of this should be used as a substitute for consultation with professional legal advisor.