GHH Realty knows that potential home buyers and sellers have many questions about short sales and how they work. The following is a smaple of FREE information you can find on our website at www.ghhrealestate.com
Q: What is a short Sale?
A: A shortsale occurs when your mortgage is "upside down."Â In other words, you owe more money on your mortgage than your house is worth.Â In a shortsale, the bank agrees to accept a lesser amount than what they are owed so that you can sell your home.Â Â
Q: How does a shortsale work?
A: Your lender must agree to a shortsale transaction.Â Generally, they will not consider a shortsale until you have an accepted offer to sell your home.Â You must also prove that you have suffered a hardship which makes you unable to make your mortgage payments.Â Finally, you must provide a preliminary Hud-1 Settlement Statement which is a list of expenses the lender will have to pay to complete the sale transaction.
Q: How long does the shortsale process take?
A: The process usually takes about 3 months.Â However, by providing us all your information quickly, we can immediately submit a package to the lender once you are in contract. By allowing us to submit a shortsale package immediately upon entering contract, we can significantly reduce the time it takes to complete a shortsale transaction.
Q: Who pays the closing costs on a shortsale transaction?
A: The lender will generally need to approve all expenses involved with the shortsale of your home. While they will pay all costs themselves, they often reduce the amount they are willing pay to various parties, including any Real Estate Agents. That's why we make sure that all parties agree not to ask you to make up the difference if the lender is not willing to pay the full fees.
Q: Why does it matter if I shortsell my house or just let it go to foreclosure?
A: In a foreclosure, the bank has the right to sue you for a deficiency judgment if they don't get all their money back.Â This can potentially cost you thousands of dollars and affect you for up to 20 years if the bank attempts to enforce their judgment. In fact, your bank may even be able to garnish your wages if they obtain a judgment. In a shortsale, the bank agrees to forgive the difference between the sale price and the balance of the mortgage so you don't have to worry about a deficiency judgment.Â In a foreclosure, your credit report generally reflects as a foreclosure which may affect your credit for up to 7 years.Â In a shortsale, your credit report will often reflect as a settled debt, which may allow you to start obtaining credit in as little as 3 years.
Q: When is the best time to start the shortsale process?
A: As soon as you realize you are unable to make your mortgage payments, you should consider all of your options.Â If, after taking a hard look at your finances you realize you will never be able to avoid foreclosure, you should immediately start the process.Â The further into foreclosure you go, the more your lender will have spent on the foreclosure process and the less likely it is they will consider any workout solution.
For more frequently asked questions and information on the Long Island short sale process, please visit us at http://www.ghhrealestate.com.