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Asked by MN/FL HOMEOWNER, Andover, MN Tue Jun 5, 2012

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Chris Block, , Saint Paul, MN
Tue Jun 5, 2012
Very good point on the tax break ending at the end of the year that is a big one!

And Belinda you can put the utilities right on the HUD and juice the number a bit that still gets accepted almost every time.

But not paying the association dues every month creates a lot of delays and it is still my opinion that homeowners continue to do that.
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Did you used to be an agent in Elk River? I am renting the home out right now but have had alot of inquiries from applicants that they would like to rent it a year and then have me assist them in getting a short sale.
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Belinda Mart…, Agent, Maple Grove, MN
Tue Jun 5, 2012
You can do a short sale with 2 mortgages with no responsibility for money with the exception of utilities through closing and possible association fees if you are in a town home. And, the biggest pitfall is if you are working with an agent who does not know what they are doing.

Make sure you look at all your options and that a short sale is the best for you personally. This can be a long process and you want to make sure you are up for it and that you are working with someone you trust that will help you through the process, not only during the listing period of your home but also afterwards. You've gotten many good answers here in this forum that explain the process and what your liabilities might be so that will help in making a decision. And remember, the forgiveness of the 1099 income (from the difference of what you owe your first lender and what your home sells for) is ending at the end of the year.

It would be worth your time to sit down with someone and go through your options - loan modification, short sale, deed in lieu, etc. You want to make sure this is the right decision for you and know the direction you are going when all is said and done.

I, like many agents, negotiate short sales, but also counsel many families in what the best decision for them might be. After 23 years in real estate, I feel this is a service I want to give back to my clients. Feel free to contact me if you have any questions or just want to go through your options.

Belinda Martin
RE/MAX Results Maple Grove
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Kris Lindahl…, Agent, Minneapolis, MN
Tue Jun 5, 2012
One other thing I would recommend is ask the agent for at least 50 short sale references. If the agent cannot provide you with this list it means they don't specialize in short sales.

Also, keep in mind this is set to expire at the end of the year.,,id=179414,00.html

Good luck!
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Donald James, Agent, Edina, MN
Tue Jun 5, 2012
Dear homeowner,

We answer this question every week. A short sale is when your lender agrees to take less than is owed on the mortgage, to go "short". You can ask for a short sale if you can show hardship or good reason that you cannot continue to pay the mortgage. Our short sale negotiators make sure the short sale cleans up all liens associated with the property including your HELOC.
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Chris Block, , Saint Paul, MN
Tue Jun 5, 2012
O boy this is a big question!

1) The primary answer is YES you can do a short sale. The definition is simply when a homeowner owes more on their home then what it is worth.

2) You will not be responsible for any costs of doing this....that is the whole reason why most homeowners have to do a short sale in the first place. You don't pay me anything, and the reason why we do a short sale is so you don't owe the bank anything.

3) Minnesota is a non-recourse state, which means the primary lender can not pursue you PERIOD if this home were to go into foreclosure. Your credit scores are not effected that much differently between a short sale and foreclosure ( has done numerous studies on this to prove it). The time to repurchase a home after a short sale and foreclosure are both 3 years.

4) So why do it? Number 1 subordinate liens (example $60,000 Home equity loan) act differently than first mortgages. You as the homeowner do not have the same protection against these, and they do have a legal claim to pursue you after a foreclosure for the amount you owe them. In a short sale situation I am able to negotiate it so you do not owe them one penny. When we speak directly I will tell you more about this.

5) Number 2 is IF DONE CORRECTLY you can repurchase a home immediately after a short sale, or at least shorten the time to repurchase from 3 years to 2 years. Are you & the spouse both on the loan? Is there just one of you? There are many factors that play into this and it all comes down to your specific situation.

6) So I am not going to pretend that short sales are for everyone that just is not true, but homeowners with multiple mortgages do benefit the most from a short sale.

7) As for pitfalls to watch out for? The biggest push back I get from lenders when I am negotiating a short sale is they want the seller to either:

1) Contribute large amounts of money at the closing table (which you do not have 99% of the time and is unnecessary)
2) Ask the seller to sign a "promissory note" that means you are still liable for a certain amount of the balance after a short sale (also not necessary).

As I have already stated Minnesota protects you against the primary lender, and there are plenty of ways to satisfy your debt with a equity loan without doing any of what I mentioned above. There are extremely rare cases where it makes sense to do either of what I have mentioned above.

8) I think the last pitfall is just getting bad service from us realtors. Number one my goal is to exhaust all refinancing options so you can stay in your home if that is desired. I have a specific loan officer that specializes in foreclosures, and I also help you contact your local HELP center (Free again) to make sure they review your file. Minnesota actually has a lot of good non-profits and government agencies that every homeowner should seek out FIRST.

9) I don't really get paid to do any of that, but I think it is important my clients have a peace of mind knowing they have the right team putting them first and foremost, and all options have been exhausted.

10) From there if the short sale is the best route I also have attorneys on call to answer your legal questions. DO NOT TAKE ANYTHING I AM TELLING YOU AS LEGAL ADVICE. Bankruptcy always comes up in a short sale situation and sometimes that is the best route. I can't really talk to you about this so I let you speak to an attorney on it.

so as you can see short sales are complicated and you want to have the right team to help you out. Every individual is different and I can not express it enough. We get questions like this on Trulia all the time and unless I know the whole story I just can't tell you what I don't know.

Hope to speak with you soon just contact me directly on Trulia.

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Zachary Adams, Agent, Plymouth, MN
Tue Jun 5, 2012
Yes you can pursue a short sale if you have the following:
1. Financial Hardship
2. Monthly Shortfall on Financial Worksheet (or pending shortfall)
3. Don't have significant assets to assist in paying down the mortgage

If you do not have a financial hardship then you will most likely not qualify for a short sale, and as far as whether you will be responsible for any $ at closing, that depends on the type of Home Eq loan, and the ability and experience of your agent who negotiates with the banks for you. Feel free to give me a call to discuss at 612-845-7890 or check out more info at


Zachary J. Adams | Wright Sherburne Realty | 763.295.5990 x103 | 763.322.8789 fax | 612.845.7890 mobile |
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Kris Lindahl…, Agent, Minneapolis, MN
Tue Jun 5, 2012
The answers to your questions vary. I need to know what mortgage companies and who the investors are.
I understand this can be a difficult decision to make. I would encourage you to talk to multiple agents. I am available for questions any time.

Kris Lindahl
#1 Edina Realty Short Sale Agent
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Kirk Duckwall, Agent, Burnsville, MN
Tue Jun 5, 2012
To answer this question and get you all the answers will take more space then is given here. I am always more than happy to talk about this subject as we cover it often on our Radio Show. Feel free to give me a call if you want to go over this further.

Kirk Duckwall
The Duckwall Team of Realtors
Edina Realty
Cell 651-303-0019
Your Referrals Are Greatly Appreciated
Tune in to our Twin Cities Real Estate Radio Show Sundays at Noon on AM950
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Tim Moore, Agent, Kitty Hawk, NC
Tue Jun 5, 2012
It does mean anything different in other states, it is the same everywhere. A short sale is a sale of property where the sale amount will not be enough to pay off the loan on it. In other words, the seller will be "short" the funds needed to pay off the loan. They happen because the value of the property has dropped to an amount lower than what was borrowed in the past to buy it.

The bank holding the mortgage must approve the sale and the sale amount and often they take a long time to close if they close at all. the bank can say NO over and over and never allow the sale.
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