Short Sale; Frequently Asked Questions

Short Sale
191 Sand Creek Rd, Ste 100 Brentwood CA 94513
Frequently Asked Questions
HOW LONG WILL IT TAKE? The Short Sale negotiation process can be rather lengthy. It may take several
weeks to several months for an approval. Many Lenders will have several layers of bureaucracy, insurers,
and investors that we will have to maneuver through in order to get a Short Sale approved. So, it is
important to be patient during this long process.
I HAVE A TRUSTEE SALE DATE, WILL I HAVE ENOUGH TIME? Maybe-maybe not. Just starting a Short Sale
will NOT automatically stop a foreclosure. We have been very successful in getting sale dates postponed
and it is always worth the try.
CAN I STAY IN THE HOUSE? This is not a program that can stop a foreclosure and allow you to keep the
house indefinitely. The key word in a “Short Sale” is sale. The purpose of a Short Sale is to get the
property sold. Your assistance will be needed if you stay in the home to properly market and
accommodate showings. Once you are in contract, it is helpful to have the home occupied. Vacant homes
are targets for vandalism which can be very costly and negatively impact our ability to get a short sale
approved. Your agent will work with you to determine the best marketing and occupancy status for your
individual needs.
HOW DO I KNOW THIS WILL WORK? Again, there are no guarantees. Once you miss a payment, the
Lender is in charge and can proceed to foreclosure if they want to. We know they do not want to and we
are very good at presenting alternatives to the Lender that they often want to accept, as opposed to
moving forward with a foreclosure. We are very proficient at what we do, but NO GUARANTEES are being
made as to whether or not the Lender will accept the Short Sale.
HOW MUCH WILL THIS COST? There is no cost to you for a successful short sale. The fees that are
charged are a percentage of the commission paid and split with the listing agent. Our compensation is
directly tied to our ability to get you an approval. Every effort will be made to receive an approval that is
acceptable to the homeowner and some negotiations may be possible if an approval offer is received.
Ultimately, the homeowner will have complete discretion to move forward with any offer from their lender
and no one will push you to move forward with and approval that is not in your best interest. As such, we
will charge a nominal fee of $500 if an approval is received and the seller declines to move forward.
WHAT HAPPENS IF THIS DOESN’T WORK? Unfortunately, your house will likely go to foreclosure. A Short
Sale is something we try after you have exhausted your other options.
WHAT IS A PROMISSORY NOTE? A Lender may offer a partial settlement, which is usually an unsecured
note in exchange for allowing the short sale. The promissory note is usually for an amount less than the
difference between the amount owed and the short payment through the sale. A release with a note will
allow the property to be sold without paying off the full obligations of the loan. Advantages: This will allow
the property to be sold and thus avoid foreclosure. Disadvantages: The remaining debt or a portion of it
(sometimes called a “deficiency judgment”) still exists. In other words, you are still liable for the note and
still owe the money to the Lender. Reality: It is not likely the Lender will pursue the deficiency unless you
have other significant assets. However, if you chose not to try the Short Sale and then you end up going
to foreclosure, it can result a deficiency judgment in most cases, and usually for a much greater amount
than the promissory note.
WHAT IS FULL SETTLEMENT? A Lender may agree to accept less than they are owed as complete and total
satisfaction of the note and release its lien against the property. Advantages: Your note and obligation to
the Lender are satisfied for less than you owed. When the property is sold, the debt is paid off completely.
Disadvantages: You may have some tax consequences that you should discuss with your tax advisor due
to the fact the Lender is making money you owe to them “disappear”. We strive to get full settlement in
every short sale although, there are times when the lender will only negotiate a release with a note