The Nation’s Best Short Sale Negotiator

Short Sale Advocates, LLC is your best resource for finding the answers you need to decide if you or someone you know is a good candidate for a Short Sale process. If you do not find what you need here, please call us at 314.590.3785 and we will discuss your situation and give you an honest analysis. NO pressure, just valuable information! We LOVE what we do because our #1 goal is to take away the fear and pressure from our clients. And, our feedback from nearly everyone we work with proves that we do meet that goal!

The Short Sale Process takes time with the submission of certain documents, a valid offer… and hopefully ends with the approval of the sale! Short Sale Advocates negotiates with the bank to accept the offer submitted. At times there are Investors involved such as Fannie Mae, Freddie Mac, the VA, FHA/HUD, etc. The bank itself can be the Investor/lendor. There might also be a Private Investor, and the bank involved could just be the Servicing Agent.

Short Sales come in EVERY price point. Even with the current market increases in value in most areas, there are pockets where prices are actually still declining in value. Homeowners in these areas are invariably forced to seek other options than a traditional sale if they have to sell.  The homes in North County and even in South City St. Louis are still declining in value. We provide a number of short sales in these areas. Homeowners may owe $40-$90,000 on homes that initially cost between $80-$110,000. Many are selling for under $30,000 at this time, regardless of their condition. We experience homeowners in trouble who owe $200,000, $400,000 or even over one million dollars. Many homeowners secured interest-only loans before the crash in 2007-08. These homes are very slowly recovering, but there are still situations where people end up owing more than market value. There used to be some shame involved in having to go to a Short Sale solution. I really do not think that exists any longer. We really do not believe that is the case any longer. It is just another viable solution for people in trouble. There are probably millions of people in our country who have experienced a Short Sale.

Have questions about the Short Sale Process? We have the answers!

What is a Short Sale?

A short sale is also known as a “sale in compromise”. A short sale exists when a Bank accepts an offer on a property that is less than what the homeowner owes on the property. Short Sales are normally listed some below Market Value and the best offer (usually somewhat below market) is submitted to the lienholder for approval. The bank essentially is requested to approve the offer or submit a Counter offer to us, at which time we negotiate to prove value. Eventually, we come to terms that are agreeable and the lienholder agrees in writing to take the loss and normally, the debt is forgiven on closing.

Will a Short Sale ruin my credit?

You may be impacted for 1-2 yrs, but your credit score is not that dramatically affected. A short sale will show as a settlement-paid rating on your credit report. However, this “paid mark” may show late payments , and may indicate the balance was not paid in full. This alone will cause a decrease in your credit score, but that is not normally anything dramatic. However, if you make your other monthly debt payments on time, it will not lower your score by much. Because of the notation on the credit scoring evaluation, it just takes 1-2 yrs to fully recover your previous score.

Do I have to be behind in my payments?

Not always. Some lienholders such as FHA, do require that the homeowner miss 2-3 mortgage payments in order to close. However, you do need to have a financial hardship of some sort… A financial hardship may include:

  • An increase in housing expenses as a result of a job transfer or move, PCS (military Permanent Change of Station orders)
  • An increase of your mortgage payment (even if that is coming up only in the future)
  • A loss of income (or reduction of income)
  • A need to move to suitable housing
  • A medical need
  • Any other reason considered acceptable by the Investor

May I purchase a home after a Short Sale?

Yes, but normally it could take 24 months after the short sale closing. As always, the final loan approval would be subject to underwriting.

Is a Short Sale better than a Foreclosure?

Definitely! A foreclosure will remain on your credit report for up to 7 years. A foreclosure shows an inability to work with your lender. Other lenders in the future will look down on a foreclosure, while a sale in compromise – Short Sale – is looked on more favorably. A foreclosure can also disallow your working in any sort of Security job.

Will I have to make mortgage payments during my Short Sale process:

If you are unable to make your mortgage payments, your chances at a successful Short sale are improved. However, you are contractually obligated to make your payments if you can. The Short Sale will not allow you to repay missed payments. However, the fees and missed payments will be factored into the final Closing Statement and the Approval details provided by the lienholder.

Will it cost me anything to list my home for a Short Sale?

Normally, no. Normally the Short Sale process costs are paid by the buyer, or allowed by the lienholder out of closing proceeds. There are occasions where the lienholder requests some payment from the homeowner at closing. This is very rare, and only happens when the homeowner might have access to some cash reserves on hand.

How long does a short sale process take?

It really does depend on the lienholder and the Investor. It seems some lienholders and Investors are moving toward trying to close more quickly. However, it can take anywhere from 3-18 months. We have experienced most lienholders and even the Government entities trying to streamline their processes to close in under 6 months.

Will a short sale allow me to avoid foreclosure?

Yes. Most lienholders will delay foreclosure if you list and receive an offer It is vital that you contact a Short Sale specialist BEFORE missing more than 2 mortgage payments. Ideally, contact us before you miss ANY payments!!

Will I have to pay taxes or receive a 1099 for debt relief?

You may have to pay taxes on the debt relief. According to the IRS, if the value of your assets is greater than the value of your debt, you will no doubt be liable for the tax liability. Contact an accountant to verify your status.

How do I begin the process?

Request a consultation by email or call us at 314.363.4170 to see if your situation might qualify. Even if it does not, we may have other suggestions such as a Deed in Lieu.

MOST IMPORTANTLY, if you are in trouble or need help, DO NOT PROCRASTINATE. We probably cannot help you if you have missed more than 2 mortgage payments.

How long will my credit be damaged?

Foreclosure

7 Years

Short Sale

4 Years, Max 95% LTV

CH 7 BK

4 Years from Discharge

CH 13 BK

2 Years from Discharge Date
4 Years from Dismissal

Foreclosure

7 Years

Short Sale

4 Years, Max LTV 90%, 7 Years, Max LTV 95%

CH 7 BK

4 Years from Discharge

CH 13 BK

2 Years from Discharge Date
4 Years from Dismissal

Foreclosure

3 Years

Short Sale

3 Years**

CH 7 BK

2 Years from Discharge

CH 13 BK

1 Year of the payout must elapse & payment performance must be satisfactory, buyer must receive permission from the court to enter into a mortgage.

Foreclosure

2 Years

Short Sale

Follow Foreclosure Time Frame

CH 7 BK

2 Years from Discharge

CH 13 BK

1 Year of the payout must elapse & payment performance must be satisfactory, buyer must receive permission from the court to enter into a mortgage.

Documented extenuating circumstances may allow for shorter wait periods. ** 3 Years, exception can be made if no late payments.

Have Questions?

We’d love to get to know you and discuss your individual situation. Let’s chat.