A short sale occurs when the proceeds of a real estate sale fall short of the balance owed on the property. In a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor. A short sale can be an excellent solution for homeowners who need to sell, and who owe more on their homes than they are worth. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders have become much more negotiable when it comes to these transactions. Recent changes in corporate policy and the Obama administration have also improved the chances of getting a short sale approved.

But to be technical, here's a more official definition:
• A homeowner is 'short' when the amount owed on his/her property is higher than current market value.
• A short sale occurs when a negotiation is entered into with the homeowner's mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then 'sold short' of the total value of the mortgage.
For homeowners to qualify for a short sale, they must fall into all of the following circumstances:
• Financial Hardship - There is a situation causing you to have trouble affording your mortgage.
• Monthly Income Shortfall -In other words: "There is too much month left at the end of your money!" A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage. 
• Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.
 
This seems simple enough, but it is a complicated process that takes the expertise of an experienced and trained professional.  Sydney, being a Certified Distressed Property Expert® is a real estate professional with specific understanding of the complex issues confronting the real estate industry, and the foreclosure avoidance options available to homeowners. Through comprehensive training and experience, we are able to provide solutions for homeowners facing hardships in today’s market, specifically short sales.
The prospect of foreclosure can be financially and emotionally devastating, and often homeowners proceed without guidance of any kind. The best course of action for a homeowner in distress is to speak with a well-informed, licensed real estate professional with a CDPE designation such as SYDNEY. We have the tools needed to help you find the best solution for your situation. Often, when other options have been exhausted, we can help homeowners avoid foreclosure through the efficient execution of a short sale.  I'm happy to say that we don’t merely assist in selling properties, we serve and help save their clients in need.
 

A Short Sale is a win-win situation!  It is typically executed to prevent a foreclosure on your home. Often a bank will choose to allow a short sale if they believe that it will result in less of a financial loss than foreclosing. For the home owner, the advantages include avoidance of having a foreclosure on their credit history and the partial control of the monetary deficiency. Additionally, a short sale is typically faster and less expensive than a foreclosure. In short, a short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount. It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer.  (Wikipedia.org) In most cases, lenders will "forgive" the remaining balance. This saves the homeowner from foreclosure, allows a buyer to get a really good deal (usually purchasing for less than market value) and allows the mortgage company to net more than they would have in a foreclosure situation.  
 

A short sale can be an excellent solution for homeowners who must sell and owe more on their homes that they are worth. Unfortunately, a number of myths about short sales have developed and it is important to understand the reality of this process.

 
Myth #1 – The Bank Would Rather Foreclose than Bother with a Short Sale
This is one of the most common misconceptions. The reality is that banks do not want to foreclose on your property because the foreclosure process is incredibly costly. Banks, investors, and even the federal government have all publicly stated that if a person is qualified for a short sale, the deal needs to be considered. Overwhelmingly, banks receive more on their investment through a short sale than a foreclosure.
The qualifications for a short sale include:
1. Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
2. Monthly Income Shortfall – “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
3. Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgagee.

Myth #2 – You Must Be Behind on Your Mortgage to Negotiate a Short Sale
While this may have previously been the case, today lenders are looking for verifiable hardship, monthly cash flow shortfall, or pending shortfall and insolvency.
If you meet these three requirements and believe that you soon may be unable to afford your mortgage, act immediately. Any delay could limit your options. Do not wait until the countdown clock to foreclosure has started and you have even less time left.

Myth #3 – There Is Not Enough Time to Negotiate a Short Sale Before My Foreclosure
This is a myth that probably hurts homeowners the most. Many do not realize that foreclosure is a process, and that there is time to make decisions that may result in better outcomes.
The foreclosing party—in most cases a lender—can stall a foreclosure up to the final day of the process. Today, many lenders will stall a foreclosure with as little as a phone call from you explaining that you are trying to sell, and almost all lenders will stall a foreclosure with a legitimate contract. For real estate professionals who understand foreclosures and short sales, there is time available until the foreclosure process is complete.

Myth #4 – Listing My Home as a Short Sale is an Embarrassment
It is understandable to have reservations about letting the world know that you owe more on your home than it is worth. However, according to recent estimates, more than one out of eight homeowners in the U.S. is in the same situation. You are to be congratulated for admitting you need help, taking action, and finding a professional who can work with you toward a solution.
With recent estimates showing 40-60% of U.S. sales will be short sales or foreclosures, you are not alone.

Myth #5 – Short Sales are Impossible and Never Get Approved
This is a complete falsehood. Are short sales more difficult to execute? Yes. Do you, as a homeowner, need to learn about a new process? Yes. Are they impossible? Absolutely not.
For example, Sydney and other agents with the Certified Distressed Property Expert® (CDPE) Designation receive thousands of short sale approvals on a monthly basis. These professionals have undergone extensive training in methods to help homeowners in distress and process short sales. While there are no guarantees in any transaction, more and more short sales are being approved regularly. This is far from an impossible process.

Myth #6 – Banks are Waiting on a Bailout and Not Accepting Short Sales
You may have heard this, but the reality is that banks (and the U.S. government) are trying to do anything they can, within reason, to avoid foreclosing on properties. It is preposterous to believe they would deny a short sale in hopes that some future legislation would pass and pay them for losses.
Today, more banks are aggressively pursuing short sales and working with agents who understand how to process them. Freddie Mac recently hosted a national training Webinar for real estate agents where they expressly stated the organizational goal of “eliminating distressed assets through modification or short sale.”

Myth #7 – Buyers are Not Interested In Short Sale Properties
This is a myth that potential sellers hear all the time. Thankfully, this is just not true. In fact, many times we are getting calls from buyers who say they only want to look at foreclosure and short sales.
For buyers, short sales and foreclosures have become synonymous with “good deals.” More specifically, international buyers are targeting these properties. Listing with Sydney who is educated in the short sale process will provide you with a great chance of quickly seeing a contract on your property.
 

A short sale does adversely affect a person's credit report, though the negative impact is typically less than a foreclosure. Short sales are a type of settlement. Like all entries except for bankruptcy, short sales remain on a credit report for up to seven years. Depending upon other credit information it is typically possible to obtain another mortgage 1-3 years after a short sale. (Wikipedia.org)
 
The Mortgage Forgiveness Debt Relief Act was introduced in Congress on September 25, 2007, and became law on December 20, 2007. This act offered relief to homeowners who would formerly owe taxes on forgiven mortgage debt after facing foreclosure. The act extends such relief for three years, applying to debts discharged in calendar year 2007 through 2009. (With the Emergency Economic Stabilization Act of 2008, this tax relief was extended another three years, covering debts discharged through calendar year 2012.)
 
Normally in US law when a lender decides to forgive all or a portion of a borrower's debt and accept less, the forgiven amount is considered as income for the borrower and is liable to be taxed.  However, after the signing of the Mortgage Forgiveness Act, amendments have been made to remove such tax liability and allow the borrower and lender to work freely together to find a common solution that is beneficial to both parties. This protection is limited to primary residences -- rental properties are ineligible for relief -- so consultation with a tax advisor is necessary to ensure that a borrower qualifies.(Wikipedia.org) 
 
 

We are committed to assisting you avoid foreclosure by offering solutions including the Short Sale of your home.  We are dedicated to work long and hard hours to do this. Our success rate, to date, is 100% success!! With proven strategies and resources, we are able to smoothly close the sale of your home and prevent you from being foreclosed upon.
 
We know that this is a difficult and sensitive time for you. Please be assured your information is confidential. Don't feel alone....many people of all ages, incomes and circumstances are going through the same thing.  We are here to help!! However, time is of the essence. Even if you are already in foreclosure, we may be able to stop it and get your house sold. Call Sydney today at 615-347-8010 or complete the following so that we can get in touch with you to get started!  
 
NOTE: Please be aware of persons who will try and take advantage of your situation through deception and downright fraud! They will present themselves in a caring way, wanting to help you get relief. Do not sign anything until you speak to a Realtor or Real Estate Attorney who is familiar with short sales.