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Short Sale FAQ's

What is a Short Sale?  A short sale is when the lender or bank agrees to accept less that what is owed on the note.

Who Qualifies?We would have to sit down with you and go over your situation.  Each short sale is handled case by case so its important to ask questions and be prepared.

Daytona Beach Area Short Sale Information

Why Choose Carlos Ring to handle your shortsale?  I can't remember the last time one of my files was not accept by the bank, lender or financial institution.  I know the documentation required to submit a successful short sale package and can help you with every detail in getting your property to closing. 

Will my Credit Be Destroyed?  A short sale is better than a late payment or a foreclosure on a credit report.  Your credit will not be destroyed.  Whatever you do, make your payment because a late payment can and will adversely affect your credit.  One thing you should remember that if you get behind on your payments and it may reflect on your credit report.  Once you close on your home your mortgage will be marked settled on your credit report. If need be, you can always contact a credit repair company.   If your monthly payments have been paid in a timely fashion and you continue to do so until you have sold the property your credit will not be impacted as much as someone who quit making their payments.

Will I have to pay federal taxes on the money my lender writes off in the short sale?  Each lender has their own lending policies and each short sale is handled case by case. In many cases the IRS treats a short sale as "debt relief" to be classified as income for tax purposes.  You may recieve a 1099 and you may not, again each bank, lender and financial institution has their own rules.  If you are insolvent  at the time of short sale and it can be verified there is a chance that the IRS will not require you to pay taxes on the loss a lender takes in a short sale.In many cases home owners find themselves in a short sale situation and are insolvent.  Keep in mind the Mortgage Tax Debt Relief Act has been extended to 2012.

Can my lender go after me for the money it loses in the short sale?  Hopefully your lender will send you a 1099-C which stands for "Cancellation of Debt."  If you hire an inexperienced negotiator or real estate agent who doesn't negotiate a full release from your lender, mortgage company or financial institution.  If that happens you would be liable for the money the lender, mortage company or financial institution loses.  You could be responsible to pay the lender for the losses with a promissory note in order to close on the property.

What if I have a first and a second loan on my property with 2 different lenders (or the same lender)? Many people who we provide short sale services often have two mortgages and with different lenders.  In order to close the transaction both lender must approve the short sale and agree to settling the debt.  Because there are two loans on the property, the first lender will not want to foreclose and sometime will give up money to compensate so that the second lender will agree to the short sale. If the first lender forecloses the second lender will get nothing.  So it would be in everyone's best interest if both lenders work together.

How will I know that I am being released from the debt?  It will be spelled out in the banks short sale approval.  It may say, releasing the debt in full, issuing a satisfaction of mortgage, no deficiency judgement.  There are several terms lenders, mortage companies and financial institutions use.  A 1099-C will be issued if the debt has been written off or settled.

Short Sale FAQ's For The Greater Daytona Beach Area Home Owners

What are the advantages of a short sale vs. letting my home go to foreclosure? With a short sale the debt is settled and you longer owe anything to the back.  If a home goes into foreclosure there is a chance you might recieve a deficiency judgement.  Also, your credit will be not as impacted by a short sale as it would be if you go into foreclosure.  Your credit will be impacted and score may vary depending on your own personal situation.

Are there any advantages to letting my home go to foreclosure vs. doing a short sale?  Letting your home go into foreclosure will have a negative impact on your credit score.  Your score could drop as far down as 400 points and it could take you 7 years to regain your decent credit rating.   Also if you allow your home to go into foreclosure there is a chance you will be liable for the deficiency.

How much will a short sale cost me? A short sale costs the homeowner nothing.  The lender covers all the closing costs, escrow fees, commissions and other fees that need to be paid unless there there are terms agreed upon by you and lender.

How long will a short sale take?
A short sale can take up to a year from start to finish and as little as 60 days by some lenders, financial institutions and banks. Depending on how many short sales are in the pipeline may have an impact on how long the process will take.  It can take longer depending on how backlogged the lender is. You can remain in the property until you close the shortsale.

Do I need to be behind on my payments to do a short sale?  NO this is a myth and you do not have to behind on your payments.  Most lenders, financial institutions and banks would rather deal with a short sale than not recieving any payments.

Do I need to hire an attorney to do a short sale?  We always advise that short sale home owners seek the advice of an attorney although it is not necessary in the State of Florida to handle a short sale.  A well versed real estate agent can handle the short sale process from beginning to end.  The majority of short sales are done by a real estate broker and not an attorney.  We charge no up front fees ever!  To find out tax implications for completing a short sale, we recommend you speak with a CPA or your accountant.  If you are intersted in filing bankruptcy, see the advice of an attorney who specializes in bankruptcy.

Who will be negotiating my short sale with the bank? My team and myself handle your short sale from listing agreement to close.  We handle the negotiating of your property.

Will filing bankruptcy help me to save my home? Chpater 7 allows individual filers to wipe their debt clean so they can continue to pay their mortage payments.  Chapter 13 is a repayment plan to repay your debts within 3 to five years.  Both types of bankruptcy can have a negative impact on your credit and may remain on your credit report for 10 years.

Can any real estate agent do a short sale? Chances are the answer is no.  Many agents have no desire to do short sales while others have no idea in how to handle a short sale.  If an agent does not handle a short sale correctly chances are the property will go into foreclosure.  Face it you only have once chance in completing a short sale.  If you agent has no idea in what they are doing chances are you will end up signing a promissory note or what's worse the property could go into foreclosure.

We hope you found our FAQ's helpful when it comes to understanding the complexities of selling a Daytona Beach area shortsale.  Contact me, all calls and inquiries are confidential.  We specialize in Port Orange short sales, Ponce Inlet short sales, Daytona Beach short sales and Daytona Beach Shores short sales!

Disclosure For Anyone Considering A short sale in the Greater Daytona Beach Area:  Exit Realty of Daytona and Carlos Ring is not associated with the government, and our service is not approved by the government or your lender.  Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.

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