Short Sales
Short sales are very common in Naples Florida. Many of the listings in our MLS are listed as ‘potential short sale’. As of July 11, 2014 8% of the total inventory of homes and condos for sale in Naples Florida are listed as potential short sales.
What Are Short Sales ?
It may be prudent to consider a short sale when the home owner is no longer able to make his/her mortgage payments. This may be due to a number of things; job loss, loss of hours, pay reduction, higher living costs, unexpected medical bills, and any other reasons. The bank will want to know is why you can’t make your mortgage payment and will want you to provide them documents showing your financial situation. Once they understand that you are unable to make your payments they will be willing to consider offers on your home that are less than the loan balance.
Do Short Sales Still Take Forever To Process ?
At the onset of the housing market collapse banks were not prepared to handle the volume of requested short sales. An agent and his buyer expected to wait for weeks before an answer would come back from a lender’s asset manager.
Conditions are different now. Banks met the challenge with resources that could handle the massive workload needed in short sales. Although it still takes longer to get a reply to an offer on a short sale listing, the process has improved greatly in the last few years. It looks like short sales will be a considerable part of our real estate market for years to com.
Short Sale vs Foreclosure
If you can’t make your mortgage payments why not just let the bank foreclose on the home? Consider the following:
After Foreclosure
- Credit scores typically drop 250-300 points
- It will take seven years to establish good credit again.
- Your lender can come after you indefinitely for the deficiency of your judgement.
After Short Sale
- Credit scores drop 0 – 50 points
- Any credit loss can be repaired in 2-3 years
- In many cases the lender will agree to a zero deficiency judgement.
More on Short Sale vs Foreclosure
*Note* – Every situation is different, so call Angela Kniep @ 239-877-2325 for a free evaluation of your situation.
Mortgage Forgiveness Debt Relief Act of 2007
Up till the beginning of 2008 any shortfall of funds to pay back a mortgage was considered income by the IRS. This means that if you owed the lender $300,000 on your home and the bank agreed to a short sale of $100,000 you would have been taxed on $200,000! Thanks to the Mortgage Forgiveness Debt Relief Act that will no longer be the case. At present, this Act is set to expire in 2012. This Act applies only to your principal residence. Read the IRS publication on this topic.
Realtor’s Role
Banks would rather work with you and your Realtor on a short sale than foreclose on you. It will costs them thousands of dollars more to foreclose on you in court than to come to a short sale agreement with you. Banks require that the homeowner uses a Realtor to market his property.
Realtors who accept short sale listings need to have a lot of experience and skill in executing short sale agreements. It requires a understanding of the lender’s asset management departments and their procedures. It also requires a good negotiator. Angela Kniep is our resident short sale expert that knows what needs to be done to achieve a successful short sale of your home.
Short Sale Specialist & Real Estate Professional for 35 years.
If you’re not sure about your eligibility for a short sale on your home Angela can evaluate your situation. She will explain the process and what your role is. Angela has helped many other homeowners get relief from mortgage debt.
Call Angela Kniep today at 239-877-2325 if you have any questions about your situation and the possible need to sell your house through the short sale method. Remember, to sell your house by this short sale method you must use a qualified real estate agent.
