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Let me show you how a Short Sale can help you avoid the risks of foreclosure.
 If you are facing foreclosure, you probably feel that you have run out of legitimate ways to pay off your mortgage. Wisely, you have avoided the “we can help you” scams heard on the radio or seen on-line. You know these opportunists only want to help themselves – at your expense. But is there any other alternative?
As an Atlanta Certified Distressed Property Expert® (CDPE®), I can help you get your home sold -- without totally ruining your credit -- using a real estate transaction called the Short Sale.
In a Short Sale, you get the approval of your bank or mortgage lender to sell your home for less than what is owed on the mortgage. But to complete this complicated sale, you need someone with special knowledge on your side. And that’s where I step in.
Review the information in the sections below for an introduction to the Short Sale process and how it could work for you. Or, contact me directly at (404) 372-9556 or email me now at debby@debbybraun.com.
Why would my Lender agree to a Short Sale?
Because of the real estate downturn and the overall bad economy, mortgage lenders and banks are much more willing to approve a Short Sale rather than foreclose. Why? Its simple economics – due to maintenance, damage, and legal expenses, a foreclosure typically costs the Lender between 30% to 50% of the property’s value. But a Short Sale costs them about the same as a normal home sale. So while they may lose money on a Short Sale, they lose much more money on a foreclosure.
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What is a Short Sale? Will It Keep My House out of Foreclosure?
A “Short Sale” describes the sale of a home or property for less than the full remaining balance on its loan. The Short Sale occurs at the closing when the home or property is “sold short” of its total value as shown on the mortgage agreement.
To see an example of a Short Sale, see the Short Sale Case Study section below.
As you can guess, a Short Sale is a very complicated process. But that ain’t all folks. Not every home qualifies for a Short Sale. For a homeowner about to face foreclosure, a Short Sale can occur ONLY if the mortgage company agrees to accept less than the full balance due on the loan.
The government has also set up very specific guidelines that the homeowner must meet. See the next section for those specific Short Sale Requirements.
As a qualified Certified Distressed Property Expert® (CDPE®), I have the knowledge and experience to help you through the complex process that is needed to qualify and list your home as a Short Sale. Contact me directly at (404) 372-9556 or email me at debby@debbybraun.com today.
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Short Sale Requirements - Does Your House Qualify for a Short Sale?
Do you meet ALL of these requirements to qualify your house for a Short Sale? Contact me and I’ll help you find out.
In a Short Sale, you get the approval of your bank or mortgage lender to sell your home for less than what is owed on the mortgage. But to qualify for a Short Sale, you must fall into all of the following circumstances:
- Financial Hardship – you must prove you have a legitimate reason you are having trouble paying your mortgage. Examples may include: loss of job, illness, divorce, excessive debt, forced or unplanned relocation.
- Monthly Income Shortfall – you must be able to prove to the Lender that you cannot now, or in the very near future, afford your payments.
- Insolvency – you must be able to show the Lender that you do not have adequate liquid assets you could use to pay down your mortgage.
The Short Sale process is very complex because it involves:
- Determining whether you, the Seller, are qualified for a Short Sale.
- Negotiating mutually favorable terms with your Lender.
- Finding a qualified Buyer who understands the higher value of a Short Sale home compared to a Foreclosure home.
With my Certified Distressed Property Expert® (CDPE®) designation, I have the skills and knowledge to help save you from foreclosure by using the Short Sale strategy. To start the qualifying process, contact me today at (404) 372-9556 or email me at debby@debbybraun.com.
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Short Sale Questions? Ask Me Why I’m the Short Sale Expert!
A Short Sale is even more complicated than a regular home sale. But as a qualified CDPE® (Certified Distressed Property Expert®), I know the answers to questions you never even thought of!
Go ahead, contact me and ask the tough questions!
- What if I don’t qualify for a re-finance, can’t afford my payments, and owe more than my home is now worth?
- How do I qualify for a Short Sale?
- Does a Short Sale look better on my credit record than a Foreclosure?
- What is a Mortgage Modification and can you help me qualify for one?
- If it means the Bank loses money on the sale, why would they want to modify my mortgage? Do I have to negotiate with them, or can you?
- Can you tell me about Home Affordable Refinance? Will that work for me?
- What are the pro’s and con’s of a Short Sale compared to Foreclosure?
Is the Short Sale right for you? Contact me by phone and let's talk — (404) 372-9556. Or, email me now at debby@debbybraun.com.
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Short Sale Case Study - A Short Sale Short Story
Here’s an actual case study of a Short Sale I made. I have changed some of the names and details to protect the identity of my client.
The No-Go Condo
Several years ago, “Bill”, a young medical professional, purchased his first home -- a midtown high rise condo -- for $198,000. To pay for it, Bill applied the $10,000 Realtor® Bonus to his down payment and got a mortgage for the remaining $188,000; in essence, putting nothing down and financing 100% of the purchase.
Soon afterwards, Bill thought his medical practice was doing so well that he could move it to a larger office and purchase a new SUV. To finance these expenses, Bill took out a $25,000 second mortgage on the condo. In reality, Bill’s practice did not grow according to his optimistic projections and he needed to sell his condo to help make ends meet. Because Bill had accumulated little or no equity in the condo, his $198,000 condo would have to sell for at least $240,000 to satisfy the two mortgages and cover commissions and selling expenses.
That was almost impossible as he had stiff competition from a glut of newer condos up for sale all over the in town Atlanta market. Six months later and still unsold, Bill took his condo off the market and found a roommate to help with expenses. The roommate turned out to be a deadbeat as was the next roommate Bill brought in.
In the meantime, Bill’s practice was failing, and Bill was up to his ears in alligators. He called me to put his condo back on the market. Soon I had an offer for $218,000. The deal almost fell through because Bill had not told me about his second mortgage, which he mistakenly believed was only a line of credit and did not have to be paid at the Closing. Bill had also failed to tell me that he was so far behind on his mortgage payments that his condo was scheduled to be auctioned on the courthouse steps in a few weeks.
Just in the nick of time, I contacted his lender and was able to postpone the auction and negotiate a short sale covering both his first and second mortgages. Obviously Bill made no money on the sale, but he did avoid eviction and could salvage what little was left of his tattered credit score.
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Short Sales vs Foreclosures
Homeowner Consequences
Future Fannie Mae Loan – Primary Residence
(effective May 21, 2008) |
A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years. |
A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage after only 2 years. |
Future Fannie Mae Loan – Non Primary
(effective May 21, 2008) |
An investor who allows a property to go to foreclosure is ineligible for a Fannie Mae backed investment mortgage for a period of 7 years. |
An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage after only 2 years. |
| Future Loan with any Mortgage Company |
On any future 1003 applications, a prospective borrower will have to answer YES to question C in Section VIII of the standard 1003 that asks “Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?” This will affect rates on future loans. |
There is no similar declaration or question regarding a short sale. |
| Credit Score |
Score may be lowered anywhere from 250 to over 300 points. Typically will affect score for over 3 years. |
Only late payments on mortgage will show on credit reports. After the sale, mortgage will be reported as paid or negotiated. This will lower the score as little as 50 points if all other payments are being made. A short sale’s affect can be as brief as 12 to 18 months. |
| Credit History |
A foreclosure will remain as a public record on a person’s credit history for 10 years or more. |
A short sale is not reported on a credit history. There is no specific reporting item for a ‘short sale’. The loan is typically reported ‘paid in full, settled’. |
| Security Clearances |
Foreclosure is the most challenging issue against a security clearance outside of a conviction of a serious misdemeanor or felony. If a client has a foreclosure and is a police officer, in the Military, in the CIA, Security or any other position that requires Government clearance, in almost all cases clearance will be revoked and the employee will be terminated. |
A short sale on its own does not challenge most security clearances. |
| Current Employment |
Employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions. A foreclosure in many cases is ground for immediate reassignment or termination. |
A short sale is not reported on a credit report and is therefore not a challenge to employment. |
| Future Employment |
Many employers are requiring credit checks on all job applicants. A foreclosure is one of the most detrimental credit items an applicant can have and in most cases will challenge employment. |
A short sale is not reported on a credit report and is therefore not a challenge to employment. |
| Deficiency Judgment |
In 100% of foreclosures (except in those states where there is no deficiency) the bank has the right to pursue a deficiency judgment. |
In some successful short sales it is possible to convince the lender to give up the right to pursuit a deficiency judgment against the homeowner. |
Deficiency Judgment
(amount) |
In a foreclosure, the home will have to go through an REO process if it does not sell at auction. In most cases, this will result in a lower sales price and longer time to sell in a declining market. This could result in a higher deficiency judgment. |
In a properly managed short sale, the home is sold at a price that should be close to market value and in almost all cases will be better than an REO sale resulting in a lower deficiency. |
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