Houston Short Sales
we can help you sell for less than you owe. don't accept foreclosure.
Are you like so many Americans today facing a possible foreclosure? Are you months behind on your payments, or too far upside down in your mortgage to sell your home?
Maybe it's time you considered a short sale?
Icon Real Estate has successfully negotiated and closed many short sale transactions -- we perfected our process before short sales were trendy. We have invaluable experience with a long list of mortgage lenders, meaning we can accurately estimate a target sales price, closing time frame, and bottom line.
The short sale process requires a substantial amount of time, effort, and mortgage-related knowledge from a listing agent; it's not simple, and the task should not be left in the hands of the inexperienced. Contact Icon Real Estate today for your free evaluation and lets us help you determine whether a short sale is the right move for you and your family. Time is of the essence.
Contact Icon Real Estate today » We are proven Short Sale Listing Agents. Contact us to discuss your options.
Common Short Sale Questions
The Short Sale Basics
So what is a short sale? In a nutshell, a short sale is similar to a traditional home sale, except in this case the bank is willing to accept a lower payoff for your mortgage -- to allow for a sale instead of foreclosure. With a sluggish economy and declining home values, short sales are becoming a realistsic solution for many struggling homeowners.
Mortgage companies want to avoid foreclosure as much as you do - let's use this to your advantage and help you get out from under an overwhelming mortgage debt or declining investment.
Getting Started
The short sale process can be a long and complicated affair. The good news: homeowners can designate an agent to communicate with their mortgage company, meaning an experienced professional can work on your behalf from start to finish. So what does the process entail?
Step 1. Get the home, your agent, and yourself ready for a short sale.
Just like a traditional home sale, this part involves meeting with a Realtor to discuss the home, mortgage details, a timeline, and expectations.
What you need:
- A recent mortgage statement.
- Previous closing documents (if available).
- A list of any improvements to the home.
- A qualified Realtor.
Tasks:
- Prepare the home for showings (unless an investor sale is expected, in which case showings may not occur).
- sign a listing agreement and associated disclosures.
What we'll Do
- Perform a thorough market analysis for your home, then speculate what value the mortgage company will see.
- Apply our past experience and lender-specific knowledge to determine a feasible short sale price.
Step 2. Tell your bank what's going on.
Every mortgage company handles delinquent loans differently, but the general idea here is the same: contact your bank immediately, inform them about the plans to short sell, and add your Realtor to the account as an agent.
What you need:
- Patience - contacting the bank may involve some hold music.
- A personal financial statement.
- Recent pay stubs, last year's tax return, 2-month's bank statements. (If you're self employed, just bank statements may suffice.)
Tasks:
- Fill out any forms for your bank to add an agent to your mortgage account.
- Write a hardship letter, explaining to the mortgage company why you can't keep the home.
What we'll Do
- Contact your mortgage company to initiate the short sale process.
- Prepare the short sale submission package per the mortgage company's requirements.
- Market the listing to the public and to our lengthy list of residential investors.
3. Be patient.
From this point, your agent takes the lead and handles most correspondence with your mortgage company. Once a reasonable offer negotiated, you'll sign a sale contract just as you would for a traditional listing. Expect anywhere from 2 weeks to 3 months for the mortgage company to accept, decline, or counter the offer.
Will I still owe the bank after the short sale completes?
In a short sale, the bank's net proceeds from sale does not cover the seller's principal mortgage balance - the dollar amount is referred to as the short amount. The seller may be responsible for this short amount in one of two ways: as remaining debt to the bank, or as a tax liability.
Most banks today opt for the tax liability route, in which case the seller receives a 1099 tax form in January following the sale. The 1099 form shows the short amount from the sale as ordinary income for the seller. The good news is that current tax law offers several exceptions for this type of tax -- check out the IRS Web Site, particularly the Mortgage Forgiveness Debt Relief Act of 2007, which provides a tax exception for principal residences (among other items). Talk to your CPA for more info!
The bank also has the option to pursue a deficiency judgment against the seller to address the shortage. This is the same type of judgment that can follow a foreclosure, where the bank sues the homeowner for the deficiency. It's important to note that the seller cannot be hit with both a deficiency judgment and a 1099! The bank must choose one of these options -- and it's up to the homeowner (or their agent) to make sure the bank properly discloses their intentions. When we handle a short sale listing, our standard practice is to demand a release from the bank showing "payment in full without pursuit of any deficiency judgment".
How does a short sale affect my credit?
One of the biggest benefits for a short selling home owner relates to credit reporting. Instead of the dreaded foreclosure stamp on their credit report, most short sale accounts are marked as settled. The significance? A drastic improvement in the seller's chances of obtaining mortgage financing in the near future. Based on lending guidelines of February 2009, short sellers may be eligible for a new mortgage after (2) years. A foreclosure carries a 5-year penalty for conventional (fannie mae) financing.
The short sale does not, however, guarantee a better credit scoring result for the homeowner. Both short sale and foreclosure will knock 200+ points from an average credit score. The credit score hit is strongly influenced by the mortgage payment history before the short sale: the longer a homeowner struggles to maintain a delinquent mortgage, the more 30-, 60-, and 90-day late payments a reported. These derogatory payment records stick - no matter what type of settlement satisfies the mortgage obligation.