6 Things You Need To Know

When Selling A House Close To Foreclosure

There Is No Cost To You For Our Services

What Is A Short Sale?

A short sale is when there is a negotiation on the home owner’s behalf with the mortgage holder to have the mortgage holder accept less for the property than is owed to the mortgage holder. There is typically an owner hardship (medical, loss of income, house payment went up, divorce and so on) that creates a situation where they cannot afford their house payment, and the value of the home is less than what is owed. Negotiating a short sale creates a winning situation for the seller, the bank and the buyer of the home. The seller gets rid of the burden they can’t afford with a full release of liability in most cases, it is usually cost effective for the bank to do a short sale rather than foreclose and the buyer gets a good deal on a home.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

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Why Should I Consider A Short Sale?

Again a question I get all the time. Typically if someone is considering a short sale there are other traumatic events happening in their life. If someone is considering a short sale they’re not only behind in their mortgage but

• They are behind in other payments
• They are very stresses
• It is affecting their family and other parts of their life such as your job
• They may be having a hard time putting food on the table
The thing that most people realize is so important to the short sale process is that it is the first step in a plan to get your life back. Once we start the process, the bank will stop trying to collect the mortgage. No more calls. Then you can start to focus on what is best for you and your family. Most people are not making their mortgage payment while we negotiate with the bank which enables you to save money for a fresh start. So the bottom line is that once the process is started the relief of knowing our family is moving in a new and positive direction is a huge relief.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

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When Should I Start to Think About A Short Sale?

I sit down with folks and really dig into the nuts and bolts of when to start a short sale. A lot of times I find that these nice people want to stay in their home or do what they feel is right by the bank. I start to realize that they have maxed out their credit cards, borrowed money from family and friends and done whatever they can to keep their house payment current. This can really put someone at financial risk for years to come.

My recommendation would be to take a hard look at your finances as early in the process as possible. Again, I am more than happy to sit with you and your family to evaluate your financial situation realistically. A lot of the time it is better to regroup, get started on the sale of your house and start preparing for the future. A future that might include another home purchase.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

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What If My House Needs A Lot Of Work And Repairs?

Many people have this concern when they are considering a short sale of their Salt Lake City area home. You will have a group of people that specialize in these types of transactions at your disposal; because, a house that needs a lot of repairs will usually offer unique challenges to the seller and the agent helping the seller. You will help us determine how long you want to stay in the home, so together we can formulate a plan that is best for you and your family. Sometimes people think walking away from their house is the only thing they can do when the house needs a lot of repairs and you are up-side-down in your mortgage. Walking away is the worst thing you can do. There are Federal programs you probably qualify for that allow you to receive up to several thousand dollars in assistance. Contact me here for a free consulation.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

Contact me here to get started

How Will The Short Sale Process Affect My Family?

This is usually the first question people ask once they understand what a short sale is. Some things are just like selling your home when it is not a short sale such as showing your home, getting your home under contract and finally closing on the sale of your home. The difference is that once your home is under contract, you can stop showing your home to potential buyers while we negotiate with the bank. This process can take a month or several months. If your home needs a lot of repairs, I can usually get the home under contract within a day or two with a cash buyer. This means no parading a lot of people through your house. While the negotiations are going on with your bank, you will need to occasionally update paperwork and sign a few papers.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

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How Long Does It Take To Complete A Short Sale?

The average time it takes to complete a short sale is 4 to 9 months. If you look at the market you will see some properties that have been on the market for over a year while in the short sale process. Every home and every family has a different situation, so the process can vary quite a bit. Remember that because you are not able to make your house payment, you can use this time to prepare for a fresh start.

There are two parts of the process that can be controlled which affect how long to process takes. The first is us. We work for you and facilitate the process with the bank. We make sure they have received what was sent, we follow-up with them when they give us a time table and we stay aggressive with the bank. The second part of the process that can be controlled is by the seller. From time to time the banks will require updated information. We will work with you to make sure we get the information from you and to the bank in a timely manner.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

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How Soon Will I have To Leave My House with A Short Sale?

This is usually the biggest concern for people. They want to know “when am I going to have to move out?” Going with a short sale does give you more control over the situation as compared to a foreclosure. Once a Notice Of Trustee Sale notice is posted, you typically only have 30 days before the sale of your house. You will need to leave shortly after that.

With a short sale, we control the situation more. We are usually able to get extensions if a Notice Of sale is posted and we are in contact with the bank all the time. So, in most cases you are actually allowed to stay in the home longer. And, since you are not able to make the house payment, you are able to stay in the home with no payment being made. The bank would actually rather have you in the house taking care of it until the short sale is done. And if you have moved on and the home is vacant, I can definitely help you in that situation. You may qualify for money under the HAFA program reguardless of if you live in the home or the home is vacant.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

Contact me here to get started

How Soon Will I have To Leave My House with A Foreclosure?

Again this question ranks at the top of the list when someone starts to become late on their mortgage payments. In Utah a lender cannot file a Notice of Default until you are at least 90 days late on your payment. Time frames can vary from lender to lender but usually a lender will file a Notice Of Default when your mortgage becomes 90 to 120 days late. Three months from when a Notice Of default is recorded the lender can file a Notice of Sale. Once 30 days have passed the lender can foreclose.

So you will have around 6 or 7 months from when you first become late with your house payment to when you have to leave. As mentioned above, the short sale process may add time to this schedule.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

Contact me here to get started

Do I Need To Qualify For A Short Sale?

The lender will look at your situation while approving the short sale. The bank will want to determine what your hardship is (loss of income, medical issues, house payment going up, home value gone down and many others) to justify that it is better for the bank to do a short sale rather than to foreclose on the house. The bank needs to know you don’t have the ability to make your house payment.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

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What Factors Will Cause A Short Sale To Fail?

In my experience time is the biggest factor in a failed short sale. If you have received a Notice of Default and also received a Notice of Sale it could be too late. It really depends on your lender, as some lenders will not even consider a short sale if you are too close to the sale date or a sale date has been issued. That does not mean we will not try no matter where your time table is, it just means the sooner you act the better. We have a team of dedicated specialists that only do short sales and negotiate with your bank.

Another important factor is who is representing you and your family in a short sale. It goes way beyond your agent and includes the team that is working with your bank. Everyone is important. You, the client, through your agent, needs to be responsive to requests the bank will have from time to time. Your agent needs to answer their phone and be responsive to questions and requests between all parties. The short sale team needs to be professional, specialize in only short sales, have a high success rate, care about your outcome and know how to deal with the banks. You can rest assured you will receive all of these benefits working with me and my team.

The HAFA program will actually allow many people short selling their home to walk away with relocation cash. From $3,000 up to $10,000 can be yours at closing. Amounts vary depending on your lender and other variables.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

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Will Bankruptcy Stop My Foreclosure?

No a bankruptcy will not stop a foreclosure. What it will do is postpone the foreclosure. Let me explain. With a CH7 or CH13 you always have to make the full amount of your house payment once the bankruptcy is resolved. In a CH13 the court will determine if you can afford the full amount of your secured payments (house & car) and then determine what you can afford with your unsecured payments. Once the court determines what all of your payments will be your house payment and everything else starts up again. If you become late again , the bankruptcy judge will typically allow the foreclosure to proceed. So until your bankruptcy is fulfilled, the foreclosure is just postponed. I am not an attorney. Please contact an attorney for details.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

Contact me here to get started

Can I Buy A House After A Short Sale?

This is the question I get asked most often from people that are considering short selling their Salt Lake City area home. For most people a 2 to 3 year wait is necessary for a lender to consider you for a mortgage after a short sale. However, there are some instances when you will be able to qualify for a mortgage right after you close on a short sale. One instance would be if you never fell behind in your mortgage payments. There may be other instances that would be dependent on why you are in a short sale and what your hardship is (was). The standard answer is that three years after you have sold your home, you will qualify.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

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Is A Short Sale Better On Your Credit Than A Foreclosure?

When people consider a short sale versus a foreclosure, one of the questions people have is “how is each going to impact my credit?” Overall a short sale is going to reflect better on your credit report.

People that are looking at your credit report and making the decision to grant you credit or not grant you credit are going to see that you actually made an attempt to remedy the situation with a short sale, more so than you would with a foreclosure. It shows as a release. It reflects much better than a foreclosure — which is the bank just taking the home.

A foreclosure will stay on your credit report for 7 years. And then there is the dreaded question on most credit applications, “have you filed bankruptcy or had a foreclosure in the last 7 years?” Yes, a short sale reflects better on your credit vs. a foreclosure.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

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Is A Short Sale Better Than A Foreclosure?

Control and credit are the biggest factors in Short Sale vs. Foreclosure. We already know a Short Sale is easier on your credit report. With a Short Sale you have the ability to some degree to control the situation. By determining when you list your home, you are in the driver’s seat more so than a foreclosure. You decide when you get to leave and get a full release of liability. You may list your home knowing you are leaving in 14 weeks whether the home in under contract or not. With a foreclosure, the bank determines when the home is sold at auction within the law.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

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Should I Do A Loan Modification Or A Short Sale?

Most of the people I talk with want to stay in their home. My recommendation is to first try to do a loan modification and try to get the loan modification approved with the bank. In most cases, the loan modification either will not be approved, or the terms that are approved from the lender will not work for you. However, if you truly want to stay in your home try the loan modification and see if you can get something accomplished with the lender. If you cannot make any progress within a couple of months, then look to the short sale route.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

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What Is A Foreclosure?

A Foreclosure is when the bank goes through the legal process of taking the house back. A Foreclosure in Utah usually takes around 7 months from the time you are late on your mortgage.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

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What Is A Notice Of Default?

A Notice Of Default is a public notice that is recorded with the Salt Lake County Recorder’s Office. This process starts the foreclosure process. This is when the matter is turned over to the lawyer to start the process of foreclosing on the house. From this point there is usually 4 to 5 months before the sale of the house at auction.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

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What Is A Trustee Sale?

A Trustee Sale is the final result of a foreclosure. Once the bank goes through their due diligence and their legal process — the bank — which started with a notice of default, and then a notice of trustee sale, and then finally the trustee sale. This happens on the county courthouse steps.

The trustee, who is representing the bank, will set the opening bid for the home. If no one bids higher than that, the bank will take the home back at that trustee auction and then they’ll resell the home at some point in the future.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

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Can You stop A Trustee Sale With A Short Sale?

As you go through the short sale process, the bank is working with us on negotiating the short sale while another part of the bank, the loss mitigation or the foreclosure department, is also going through the foreclosure process in the event that the short sale does not end up working. It is quite common for a notice of default and then a notice of sale to be issued during the short sale process. However, our job is to make sure the notice of sale is extended or suspended altogether. You can rest assured our team of experts is monitoring your short sale process daily. So yes, in most cases the foreclosure sale of your home can be avoided.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

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Are There Tax Liabilities With A Short Sale?

Through January 1, 2017 there is usually no tax liability on the short sale of a primary residence. The Mortgage Forgiveness Debt Relief Act of 2007 allows one to not have to claim the difference between the mortgage balance and the sale price of your house. The Act has been extended through January 1, 2017, and it is possible it could be extended past January 1, 2018. I am not an attorney or tax professional, so please contact an attorney or tax professional for tax advice.

Timing with the bank is so important if you are behind in your mortgage payments or think you will become late on your mortgage payments in the future. The bank will usually move quickly through the foreclosure process if they think foreclosure is immanent. It is almost never too late to start a short sale weather you are in foreclosure or not even behind in your payments yet.

Contact me here to get started

Gary Parker

Attorney John Turner

Bank Coordinator Short Sales

Jon Coordinates all communication between Buyer, Seller and The Bank.

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Short Sale Transaction Coordinator

Sheri Coordinates the Short Sale between the listing agent, the buyer’s agent and Turner & Associates.

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Escrow Officer

Victoria Makes sure the money is properly accounted for among all parties thereby assuring a secure experience.

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