A Short Sale is the sale of a home when sales proceeds does not fully pay off the existing loan and the lender accepts a discounted payoff to fully satisfy the loan. This occurs only when a home seller qualifies for a short sale through proving a hardship, and the lender agrees to this lower payoff amount.

Is it to my advantage to do a short sale?

A foreclosure can impact your credit far more, especially in the long term. In addition, in the event of a foreclosure, in many states the lender will seek a deficiency judgment in the amount you owe. They could even come after other properties and assets of yours, including vehicles. Your credit could recover from a short sale in less than two years, where as a foreclosure or bankruptcy can take 7-10 years.

Can GC Investments, Inc. help me with a short sale?

We are short sale specialist. That is all we do. We help homeowners by working with your lender to negotiate a lower payoff amount in order to price your home below competition and get it sold. Our agents will also aggressively market your home to attract buyers and oversee the entire sales process of your home. These services are at no cost to homeowners. Only the best and most experienced associates are able to stay in our network.

Anywhere in the United States, our network is nationwide!
Click Here To Contact Us or call (503) 914-2744

Click Here for a lender short sale package and list of required documents.

What are the qualifications for a Short Sale?

Mainly that you are in some type of "financial hardship". so long as the hardship is real and the mortgage company believes the loan is likely to become delinquent as a result, the Short Sale request will be processed by the Loss Mitigation Department. A big key to getting Loss Mitigation to accept a hardship is to submit a strong hardship letter. The hardship letter sets the tone for the entire file.

Below you will find a list of “hardships” that are common and frequently accepted by mortgage lenders.

Family illness or injury
Illness or injury in the extended family – particularly if it forces relocation
Job relocation when the property is equity deficient
Job loss or significant income loss
Divorce or split of domestic partners
Adjustment in mortgage payment or unforeseen increase in living expenses

You must be able to prove your inability to pay.

I am current on my mortgage. Can I still do a Short Sale?

The answer is, maybe.
Some lenders will accept a Short Sale file for approval on loans that are not delinquent. Other lenders will not accept the file until the loan is delinquent. We can put your Short Sale file together within a couple days and submit it for approval. (Remember, there is no charge for this). That is the best way to determine if your lender will accept a file for approval on a loan that is current.

Do lenders approve all Short Sales?

In a word, NO. That is why it is critical to work with someone that has extensive experience at getting Short Sales approved. From the presentation of the Short Sale package to the lender to working with the lenders Loss Mitigations Department, we know how to keep the file moving towards approval.

I have two loans. Can I still do a Short Sale?

Yes. We can work with both lenders (many times the same lender hold the 1st and the 2nd loans) to put together a Short Sale transaction. Even if the value of your home is below the balance of the 1st mortgage, we can normally get the two lenders to cooperate. In the end, neither lender wants to own another home through foreclosure.

My property is in rough shape and needs work. Can I still do a Short Sale?

Absolutely. In fact, lenders are more motivated to do a Short Sale on a property that needs work than on a property that doesn’t. The lender knows the risk of loss goes up when they foreclose on a property that needs lots of work. Aside from expense of completing the work, lenders are simply not set up to get the work done. They are in the loan business, not the fix- it business.

What if my home is worth more than my loans, but I could not pay the closing costs?

There can still be a short sale. Many homeowners in the country have avoided adjusting the price of their home to current market value in a desperate attempt to receive enough money back to pay off their loan balances. If this is you, you are just delaying the inevitable, as home values continue to fall across the country.

If I short sale my home, can the bank come back after me for the money?

Not in most cases, but it is a possibility. We will work to get a full release for you at closing. This release will fully forgive any deficiency between the amount you owe, and the proceeds from the sale of the home. In the cases the bank will not forgive a deficiency, you should consult an accountant regarding tax ramifications, especially if it is an investment property. Use the IRS 4681 Insolvency form when filing taxes.

What happens to the money that is forgiven from my lender?

Any balance shortfall on your mortgage will likely be written off as a loss by your lender. Your lender may send you a "1099" for any amount forgiven you. Due to the Mortgage Debt Relief Act of 2007, you are NOT required to pay taxes on this money if you short sale your primary residence prior to 2012. In the cases the bank will not forgive a deficiency, you should consult an accountant regarding tax ramifications, especially if it is an investment property. Use the IRS 4681 Insolvency form when filing taxes.

Who will pay the Realtor commission?

The lender does. We negotiate with the lender to pay a regular Real Estate Brokerage fee, just like a home seller would in a traditional transaction, and just like they would if they foreclosed on your home. Again, you pay $0 out of pocket, period.

How much work will this take on my part?

Not much. You will need to gather certain financial information and forms for us to present to your lender. Our agents will handle the negotiations and details with your bank as well as the process involved in selling your house. View our Get Started page for more details.

If I am going through foreclosure, can I do a short sale?

YES. Banks are more than happy to work with you on a short sale. It is to the banks and your advantage to work out a short sale if you are in financial hardship. The foreclosure process costs the lender an average of $59,000!

Can I stay in my house until the short sale is completed?

YES. You will not have to more out until the closing. In fact, if you are facing foreclosure and we are actively working with you bank, we can typically get your lender to delay the foreclosure proceedings and make it possible for you to stay in the home for some time.

Will the bank continue their collection activities?

Yes, the bank will continue its collection activities. That may mean they will call you or send you letters looking for a payment even if you are currently pursuing a short sale. But, most banks will not foreclose on your home if you are actively working on the short sale.

What if the terms of the short sale the bank gives me are unfavorable?

If the terms of the short sale are not in your best interest you are not required to sell the property and complete the short sale. Do remember though that a short sale will have the lender forgive you of the debt and is the best option to avoid foreclosure or bankruptcy and will have the least negative effect on your credit. If you choose not to do a short sale the bank will NOT forgive you of the debt and may continue to pursue you for the outstanding loan balance.

Are there any dangers to be aware of when working a Short Sale?

Be careful of "scam artists or shady individuals if you are in financial hardship or facing foreclosure! These sharks can cause more harm than good. Never sign a quit claim deed, power of attorney or a $10 option to purchase your home without consulting an attorney. A good rule of thumb is to understand that anybody trying to purchase your home will look out for their own best interests in the transaction, NOT yours.

Can my current Realtor work a short sale on my home?

NO, unfortunately not in many cases. While there are many agents do negotiate and work short sales, most lack the knowledge and experience necessary to property execute one. A short sale is NOT part normal realtor training. The results can be disastrous! An experienced Short Sale Realtor knows how to make deals happen, when inexperienced agents make foreclosures happen. We help guide our agents through the process to make sure everything is done property and followed through in a timely manner.

Can I repair my credit after a short Sale?

YES! Call GC Investments for some recommendations for credit repair companies.

We understand this may be a very difficult and stressful time for you and your family. Our job is to get rid of your headaches and help make things go as smoothly as possible for you. We are a nationwide network of Real Estate professionals who are very experienced in working with home owners and lenders in this highly specialized process.

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