The Sales Process

What can you expect when selling us a house?

When we’re contacted by a homeowner who’s interested in selling their house quickly, we will schedule a convenient time to visit the property. The inspection takes approximately 15-20 minutes, then I will present a cash offer within 24 hours. Once the offer is accepted, and the Purchase and Sales Agreement is signed, we’re
able to close in a few as 7 days, or whenever it’s convenient for the seller. Since we purchase properties “as is”, there are no home inspections, and there’s no need or the seller to clean out the house.

How do we work with the Probate process and the related properties?

When a homeowner passes, the property is held in their estate during the probate process, and the heirs are often left with the burden of cleaning out and selling the property. While there may be times when the heirs decide to retain the property, more often they’re interested in selling. The physical and emotional strain of cleaning out a loved-one’s house, specially after decades of accumulation, can be overwhelming for many, which is why we offer to purchase homes “as is”, with no need for the seller to clean out the property. Also, since most heirs have little or no experience selling a house, we help by guiding them through the entire process, and since our offers don’t require a lender approval because we’re paying cash, the sellers know the transaction will close. As an added bonus, there’s no real estate commission!

What is a Short Sale?

In real estate, a short sale occurs when your lender agrees to accept less than a full payoff to satisfy your mortgage when you sell your house for less than you owe.

Who Qualifies for Short Sales?

Not every home loan qualifies for short sale consideration. The most important deciding factor, in most cases, is whether or not you can get your lender to play ball. Most will if your property is facing foreclosure or you’re falling behind on payments. They understand that recovering most of the debt is better than making a more considerable loss through foreclosure proceedings. Anyone who is underwater on a home loan is a potential candidate for a strategic short sale as well as anyone who finds themselves in a distressed selling situation.

Are there Advantages to Short Sales vs. Foreclosures?

There is absolutely no benefit or value to you for letting your home go into foreclosure. It’s a dark stain on your credit report that will follow you around for the next seven years. Even after a foreclosure, you may find yourself on the hook for money the lender was unable to recover in the resale of your property or for income taxes on the loss.

In a short sale situation, the lender agrees to settle the debt for less than you owe. In some loans, depending on the type of loan you have, you may face some liability for income taxes on the amount lost by the bank, as you would in a foreclosure, but you would not be liable for the deficiency in most cases as long as the property was your primary residence.

The best news, for most people facing a short sale, is that you’ll be able to buy a home again within two years rather than waiting a full seven years before you can buy again after a foreclosure.

Will You Have to Pay Federal Taxes on Short Sales?

Before you hear the specifics on taxes and short sales, keep in mind that the federal government is sympathetic to the plight of homeowners who are struggling to make payments. Relief is being offered in many ways in an effort to make the process a little less painful.

One of the ways the government has stepped in to help is through the Mortgage Forgiveness Debt Relief Act. This act allows you to exclude the discharge of debt on your principle residence from your income. Obviously, there are some restrictions, and the limit for relief is two million dollars or one million dollars if you are married filing separately.

Do You Need an Attorney?

Laws vary from state to state, but it’s wise to obtain legal representation in all real estate transactions.

Must You Be Behind in Payments to Qualify?

Ultimately, it is not a requirement for people interested in pursuing a short sale to be behind in payments. However, lenders are generally more motivated when buyers are beginning to show signs of trouble making timely payments. It depends largely on the health of the local housing market and how the bank feels its odds of getting the full amount will be if they hold out and decline the short sale.

How Long Will it Take to Close the Short Sale?

While this will vary from case to case, depending on how backlogged your bank is at the time of your request, most transactions take  from four to six months from start to finish.

Is Bankruptcy a Better Option than a Short Sale?

Bankruptcy does present a few options that foreclosure does not. However, there are no guarantees that you will be able to save your home from foreclosure indefinitely once you’ve gone through bankruptcy proceedings. In fact, very few people are able to do so.

You also still have problems with credit in the aftermath of a bankruptcy that can follow you, depending on whether you filed for Chapter 7 or Chapter 13 bankruptcy can follow you for as many as ten years. Short sales offer a much speedier recovery period even though you do lose the home. Bankruptcy, on the other hand, offers no guarantees that you’ll be able to save your home, and will only postpone, and not stop the foreclosure proceedings.