Short Sale Cleveland

Is your home worth less than your mortgage balance? Has a recent change in your circumstances left you unable to make your loan payments but you can only sell your home for less than the debt you owe on it? Does your house need extensive repairs but fixing the issues would cost more than what your home is worth? Is your house ‘underwater’, you are late on your monthly mortgage payments; the lender has sent you Notice of Default and you may be facing foreclosure?

If you answered yes to any of those questions, you might be wondering about your options. These are difficult circumstances and can leave a homeowner feeling helpless. Although these circumstances are far from ideal, you may be able to improve your financial situation through a transaction known as a short sale. A short sale is a process where the lender approves the sale of the home for less than the remaining mortgage debt. If approved and properly executed, a short sale can offer a preferable financial outcome for both the lender and the homeowner.

We have put together a comprehensive list of resources going over the process, short sale nuances as well as a very thorough list of Frequently Asked Questions that goes over most questions you may have about short sales.

A quick guide explaining what the short sale process is, qualifications for a short sale, your responsibilities as a seller, necessary financial paperwork and the lender’s process.

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A comprehensive Frequently Asked Questions guide summarizing the basics as well as in-depth short sale questions. If you are limited on time, this would be the resource to read.

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An effective Hardship Letter is so important that we put together a separate resource focusing on composing an effective letter that will increase your odds of getting your sale approved.

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If you have more then one loan on your home such as a home equity line of credit or another type of credit, the short sale process gets more complex. Find out the details on what can be done here.

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If your home loan has Private Mortgage Insurance, or PMI (it is usually part of o your monthly payment), getting your short sale approved may be more challenging. Read more here.

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While every short sale is different, sometimes short sales fail. Find out the most common reasons a short sale can be unsuccessful as well as what, if anything, can be done in each scenario.

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Attempt Refinancing or Loan Modification

Before jumping right into the short sale process, you should contact your lender to attempt restructuring your loan first. Although it isn’t always possible, receiving loan modification or refinancing would allow you to remain in your home and may be all that is necessary to remedy your debt issues. This might mean a temporary suspension of your mortgage payment until your hardship improves, a reduced interest rate on your loan, or a restructuring of your payment plan so that you can afford the monthly payments. If these potential solutions are unavailable to you or they simply aren’t enough to remedy the issue, a short sale may be your best option.

Selecting an Expert Real Estate Professional

One very important, if not the most important, step in the short sale process is selecting a qualified and experienced real estate professional to assist you through the short sale process. Your realtor will be instrumental in not only your short sale’s success, but also in streamlining the process and negotiating the best possible contract terms on your behalf. Poor judgment when selecting your realtor may result in delays in the already lengthy process, problems with an uneducated buyer that does not understand the process or jeopardizing the success of the short sale all together.

We have been in the Real Estate industry for over 15 years and have completed numerous short sales over the course of our careers. You may remember the market crash of 2008-2009, we were right there fighting for our clients to short sell their homes that have become a burden. Since then we have settled countless short sales and have a reliable and proven system to help you in your unique situation.

Our responsibilities in the short sale process include:

  • Listing and selling your home
    • Conducting a comparative market analysis (CMA) or broker price opinion (BPO) to establish the home’s approximate value.
    • Conducting a comparative market analysis (CMA) or broker price opinion (BPO) to establish the home’s approximate value.
    • Indicate that the home is a short sale and is dependent on lender approval in MLS listing.
    • Market the home to prospective buyers.
    • Negotiate the terms of sale with the buyer.
    • Ensure that the buyer understands the length and complexities of the process and intends to wait as long as necessary.
  • Assist you in assembling the short sale package
    • Contact the lender and confirm short sale process qualification.
    • Establish what paperwork your lender requires.
    • Assemble a complete hardship package.
    • If there are several lenders, we will establish what each lender requires and help you assemble individualized packages if necessary.
    • Get packages sent to the lenders for their assessment.
  • Handle correspondence and negotiations with lenders on your behalf
    • Checking in with the lender regularly throughout the process and holding them accountable is necessary.
    • Negotiate preferable sale terms with the lender, minimizing lingering debt with a goal of getting rid of it entirely.

Assembling Your Short Sale Package

The content of your short sale package is what is going to be heavily scrutinized by your lender(s) and what they will use to decide if they wish to approve or deny the sale. Leaving items out or submitting incomplete or incorrect documents can result in delays to the process and endanger the sale’s potential to be approved. Having an experienced real estate professional assist you in assembling the package can ensure that you get things right the first time around.

Although the requested documents may vary from lender to lender, the package will typically need to include:

  • Authorization letter allowing us to speak with the lender
  • The listing agreement
  • The purchase agreement (if we have already secured a buyer before submitting the package)
  • Buyers pre-approval letter (again, only if a buyer has already been secured by this time)
  • A hardship letter that explains your situation and why you need a short sale
  • Last 2 years’ federal tax returns
  • Last 2 years’ W-2’s or 1099’s
  • Last 2 paystubs
  • Last 2 months’ bank statements
  • Estimated HUD-1 (a closing document showing net proceeds)

Be Patient with the Process

It’s important to know in advance that short sales are notoriously lengthy. Exactly how long it will take can vary, but they are generally several months from start to finish. The number of lenders involved with your debt in the home will certainly play a role in the speed of the transaction. In order for a short sale to proceed, all lenders must agree to the terms of the sale and release their liens on the home for a clear title. Short sales with only one lender are typically much easier and more straightforward since there is no division of the sales proceeds. More lenders typically means more time spent negotiating how proceeds will be divided and more time required for the lenders to analyze all aspects of the deal.

Once the short sale has been analyzed by the lender(s), your sale will either be approved, denied, or a counteroffer may be proposed. Counteroffers are very common and may prolong the process, potentially frustrating some, or all, of the parties involved. We encourage patience and set expectations in both yourself and the potential buyer throughout the process. By keeping in regular contact with your lender(s), we can ensure that the process goes over smoothly and efficiently to minimize the time and frustration associated with the transaction.

On the Right Track, but Not out of the Woods

Although getting approved for a short sale will be better for your finances than being foreclosed on, it won’t necessarily set you free and clear of all debts. The short sale will almost certainly reduce your debts but won’t magically vanish all of your financial issues.

After the sale is complete, you may have to address some lingering debts. These could include:

  • A deficiency judgement
    • A deficiency is the difference between the total debt you owe a lender and what they net from the short sale. Choosing an experienced real estate professional is critical; he/she has to be aware of a possibility of a deficiency judgement and ensure that the remaining debt is wiped clear, however that may not always be possible. This may mean making a cash payout to the lender at closing or signing a long-term promissory note to repay either the full deficiency or a portion of it. In either case, hiring a knowledgeable agent is of outmost importance so that you are educated and fully understand the settlement terms your lender is offering.
  • Necessary taxes on forgiven debt
    • The Further Consolidated Appropriations Act of 2020 extended Qualified Principal Residence Indebtedness (QPRI) exclusion through 2020. This means that you may not be required to pay taxes on any forgiven short sale debt. However, the act only applies to principal residences, so if you’re selling a rental property or vacant home that you own, rather than your family home, you may not qualify. Speak to your tax professional to see where you stand. We can provide several tax professionals for you to consult.
  • Credit damage
    • Having debt forgiven will have a negative impact on your credit. The effects of a short sale, however, may be far less detrimental than those resulting from a foreclosure.
  • Closing costs and fees
    • The closing costs and other fees associated with a home sale will need to be covered by one of the parties involved in the short sale. Who is responsible in any given situation will depend on the terms agreed upon in the short sale contract. If neither the lender nor the buyer is willing to cover certain expenses, you may be required to do so for the short sale to succeed. The sale must be structured and presented to your lender strategically and clearly to maximize chances of a successful

If your house is worth less then what you owe on it due to any reason, we may be able to help. Your house may be worth less than the outstanding debt due to real estate market changes, additional debt like liens, unpaid property taxes; or due to weather damage or unexpected necessity of repairs. If you are experiencing a personal financial hardship due to job loss, reduction in pay, medical expenses, divorce, natural disaster, COVID 19 or any other reason, a short sale may be good option. There are no out of pocket selling fees to you. The selling commission is paid from the lender’s net proceeds and sometimes via a buyer premium. Please reach out to us over email, phone or text and we would be happy to connect with you to discuss how we can help you during this difficult time.

We are available for an in person meeting or a Zoom/Skype Video Conference.

How It Works

If your home is worth less than what you owe on the mortgage, then you might qualify for a short sale. See how easy it is to get started. Contact us today to get a free list of short sale properties available in your area.

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We start the short sale negotiation process on your behalf and take care everything for you at no charge.

About Us

Ohio Short Sale Center works with highly experienced real estate, law and accounting professionals that are very knowledgeable in short sales and the process involved. We help ensure that the necessary documentation is collected and properly submitted to your lender. Our representatives negotiate with your lender and its agents until the transaction is complete.

We represent you and your best interest in the transaction and are committed to negotiating the best scenario for you.

Ohio Short Sale Center will not take ownership of your property; we are simply an agent representing your best interest in a transaction; if we find you a qualified buyer and successfully negotiate the sale: then we get paid.

Contact Ohio Short Sale Experts Today

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