WHAT IS A SHORT-SALE?

What is a short-sale?

In its simplest definition, a short-sale occurs when the lender or investor accepts less than the full balance of a mortgage to close out a borrower’s account. This is not to say that the unpaid portion, or the deficiency, will be forgiven but there’s a good chance that it will in this situation rather than in a foreclosure situation. According to Illinois law, a lender has the right to file a “Deficiency Judgment” against borrowers who has defaulted on their mortgage. Depending on the borrower’s hardship, this judgment is almost a certainty when a borrower defaults on his/her mortgage in Illinois and the home forecloses . Knowing this information, it would be a mistake not to take advantage of short-selling your home rather than take the legal risk of foreclosure, especially when the short-sale keeps your credit score from plunging too low. 

The biggest advantage in a short-sale situation is that your lender or servicer will pay for all of the cost involved with selling your home. These costs include, but are not limited to, real estate commissions, your own attorney fees, taxes (unpaid), second mortgages or PMI Insurance, revenue stamps, title charges, association dues (if applicable) and any other lien against the property. You literally will not have any expenses to worry about in this situation and the best news is that you’ll be spared a foreclosure on your credit report. This is a huge advantage that you’ll appreciate more in the future than you do now. 

Below are other advantages in a short-sale situation:

·         “Deficiency Judgments” are seldom filed when borrowers participate in a short-sale and this is a HUGE ADVANTAGE!

·         You have no expenses from start to finish.

·         Credit report reads “Paid in full for less than full balance” not a foreclosure.

·         You can stay in your home during the short-sale process and save money.

·         You may get money back if your short-sale closes, especially if your loan is FHA, Fannie Mae or Freddie Mac.

We have a "No sign on property" policy if you wish to keep nosey neighbors out of your business. There's no reason not to short-sale if the only other option is a foreclosure. Giving your home back to the lender is NOT AN OPTION!

Getting started with a short-sale is easy. The first step is for us to get an "Authorization to Release Information" form signed by you that gives us and your attorney permission to speak with the lender or servicer on your behalf. The bank will not speak to us without this release because of the "Mortgage Privacy Act" that is inforced through your mortgage company. 

The next step, if you already haven't done so, is getting your hardship in writing, nothing more than one or two paragraphs at the most explaining why you became delinquent with your mortgage payments. This should be simple and to the point. We will go over the Listing Agreement with you the same day and within 24 hours your home will be on the market. You should know that the process for selling your home as a short-sale is lengthy and could take up to 5 months to complete, but the good news is that this time will allow you to save up your money and plan your next move. This time can be cut shorter depending on when you contacted us to begin the process, and believe me we need all the time we can get to close a short-sale deal.

The foreclosure timeline is still ticking away once the property is put on the market, and that's why we need all the time we can get to successfully short-sale your home. Your home will be listed at "Fair Market Value" and price adjustments will have to be made until an offer comes in. The closer we get to the projected sheriff sale date the more aggressive we have to become. You are still the owner of the property during this process so we'll need your signature on any offer that comes in, possibly several offers. We may suggest that you sign a "Power of Attorney" during the process so you aren't burdened to free up some time whenever we receive an offer. The "Power of Attorney" is limited to the short-sale of your home only and the attorney will act on your behalf to take care of the short-sale. You won't have to come to the closing using this instrument and 15 of our 16 short-sale clients this past year did just that.   

INITIAL ITEMS NEEDED FOR THE SHORT-SALE:

• Hardship letter
• Authorization letter (provided by us)

ITEMS NEEDED AFTER RECEIVING AN OFFER:

• Last two paystubs
• Last two bank statements
• Financial statement (provided by us)
• Last 2 year's tax return
• Chapter 7 Bankruptcy discharge (if applicable).
• Copy of divorce papers and "Quit Claim Deed" if applicable.

The above documents requested by the lender may sound intimidating to you but the lender is only looking for additional accounts or income that you didn't mention on your financial report. It's important to be honest because this information will be used, in part, to determine your eligibility for the short-sale. We've closed 16 short-sale properties in the last year and the above documents were all required to close those deals, so you can see that this wasn't a factor to get the shor-sale approved.   

You’ll have the best Real Estate Attorney in the area representing you for free and two tenacious Real Estate Agents that thrive on challenging adverse situations. We’re here to help support your effort to stay in your home if it’s possible or at the very least help you to avoid a foreclosure. Foreclosed homeowners didn’t have this option or support in the past and this is a huge advantage for distressed homeowners today. It pays off in the near future to short-sale today.

We have the necessary experience to deal with your lender and the tenacity that few lenders have had to deal with in this situation. There will be a lot of homeowners that won’t do anything because they don’t care enough after losing their home, but most will regret this decision within the first year because of their struggle after the foreclosure. Don't let this be you!!

Don’t hesitate for a second to contact us for more information. Email us at lthrowdklein@comcast.net and describe your situation in detail. Or just call:

Lee @ 708.253.8996                           or                        Denise @ 708.906.4961