Hermes & Associates of Keller Williams Realty has helped hundreds of homeowners over the past few years sell their homes and the short sale is a big part of our business. A Short Sale is when a homeowner is allowed to sell their current primary home for less than the amount owed. The Lender agrees to take the loss in order to prevent a foreclosure.
On average a Short Sale nets a lender 12% more than a home that is sold after foreclosure. Along with this cost savings, a foreclosure typically costs a lender over $25,000 in foreclosure costs including attorney fees, carrying costs of the home once acquired and various other costs associated.
The benefit to the Seller is that with the extension of the Mortgage Debt Forgiveness Act, the Seller is not taxed on the lenders loss which can save a homeowner thousands of dollars as well as the short sale is much less damaging to credit than a foreclosure. With a typical foreclosure a Buyer would not qualify to purchase another home using lender funds for at least three years and possibly much longer, up to seven years if a bankruptcy is also involved. With a short sale, the timeframe is shorter and with improved credit scores can be done with FHA financing in as little as two years after the short sale is completed. FHA financing is a great option which only requires 3.5% down payment and with interest rates still hovering around 3.5% this is the best option for those who have had a Short Sale on their credit.
We have also successfully negotiated Short Sales with homeowners who are current on their mortgage and who have bought a home immediately after the short sale and have had NO waiting period!!
One of the keys to make sure you are protecting yourself when negotiating a Short Sale is to confirm that your lender is not requiring a Deficiency balance that you are required to pay. Many times lenders will initially ask that a borrower sign a Deficiency Note requiring them to pay a portion of the difference between what the final net sales price of the home is and what is owed. Hermes & Associates works with Sellers to make sure this is not included in the Short Sale Approval letter and this is negotiable. Many owners, if they are not working with an experienced real estate agent or Negotiator are stunned to find out at the closing or soon after that they signed a deficiency note without realizing what they were signing.
If your or someone you know is falling behind on your mortgage or thinking about letting your home be foreclosed on, please STOP and give us a call or email us. There are no commission or upfront fees required doing a short sale using Hermes & Associates. The Sellers lender(s) pay our fees so there is no cost to a Seller.
Please feel free to also reach out to us to discuss any questions you might have on the process.
Matt Hermes
Hermes & Associates
Keller Williams Realty
Top 5 Team in SE.
678-775-2787
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