Short Sales

Short Sales

With more than 51% of all homeowners in the Sacramento area under water, there are more and more people looking for a way to sell their homes and avoid foreclosure. Fortunately, there are options and Granite Equity Group is here to help.

Granite Equity is your Sacramento area foreclosure avoidance expert, and we can show you how other homeowners are getting out from underneath their upside down mortgages and avoiding foreclosure by using the short sale option. A short sale is when the bank, or lender, agrees to allow the homeowner to sell the home for less than what is owed. The remaining unpaid debt is then absorbed by the lender, effectively forgiving the deficiencies that result from the sale.

You may be asking why the banks would do this. The answer is pretty simple; their losses and financial liability is much greater if they were to have to actually foreclose on the home. If they are forced to choose between a short sale or a foreclosure, they will often choose the short sale.

If you are currently behind on your payments, upside down in your mortgage and dealing with other financial hardships, like job loss or divorce, you may qualify for a short sale. Contact Granite Equity Group today for a free, no obligation review of your situation and we may be able to help you - just as we’ve helped so many other Sacramento area homeowners.

Below are answers to some frequently asked questions:

Q: How does a short sale work?

A: We find a buyer who is willing to pay market value for the home. Once an offer is received, we negotiate with the homeowner's bank to accept the offer received. Once the lender accepts the offer, they are forced to relieve the homeowner of the debt on the property IN FULL. After the transaction is complete, the homeowner now owes nothing to the lender for the remaining balance.

Q: How do I know if I qualify for a short sale?

A: Every situation is different however the most common consist of a financial or personal hardship (ie.divorce, medical issues, job loss, job relocation). You may also have unfavorable loan terms, such as an adjustable interest rate, or large balloon balance, and have had a loan modification recently denied.

Q: How will a short sale affect my credit?

A: Going through a short sale is much less damaging to an individual's credit score then allowing a foreclosure to happen. Typically, a short sale will affect a homeowners credit score on average of 50 points. Going through a foreclosure, the credit hit could be as much as 250-300 points.

Q: What if I’m already in foreclosure proceedings?

A: If you are already in foreclosure status, it NOT too late to begin the short sale process. A short sale will stop foreclosure as well as a potential future auction date on your home. As your agent we contact your lender and negotiate the delay in foreclosure proceedings while we list your property and find a new buyer. In the meantime this gives you adequate time to plan an moving strategy without the stress of being locked out of your home without notice.

Q: How long does a short sale take?

A: Short sales on average take anywhere from 60-120 days from start to finish depending on the lender and once we have a buyer in place.

Q: How much will a short sale cost me?

A: Short sales are “As is” sales so there is no out of pocket expenses. We don’t charge our clients either. Our compensation is paid by your lender and not passed along to the client.

Q: Will I owe any money at closing?

A: You should expect a seller contribution typically one or two mortgage payments to the lender at closing, but this is negotiable and depends on your scenario. If it's your primary residence, and you're not too far behind on your mortgage, then usually banks don’t ask for anything. If a homeowner has a Home Equity Line of Credit, or has refinanced their original loan, then lender may ask for a contribution at close of escrow. If the contribution is reasonable for the homeowner, we can continue with the short sale. If the contribution is NOT reasonable for the homeowner, then we can renegotiate for better terms.

Q: Will the bank expect me to pay the deficiency?

A: According to CA law, no judgment shall be rendered for a deficiency for the first and second trust deed if they approve a short sale in writing.

Q: What are the tax consequences of a short sale?

A: For tax years 2007-2012, the Mortgage Debt Forgiveness Relief Act of 2007 excludes mortgage debt forgiven up to $2 million dollars (you will NOT have to report it as income) as long as it was your primary residence. We recommend speaking with Certified public accountant regarding this issue. This is scenario based as well, depending on whether it's a primary residence or an investment property, and whether it's purchase money or refinance money. The good news if your lender approves the short sale in writing then you’re hands are now clean of this mortgage debt.