Short sale question

I know there are a few real estate agents here that might be able to help me with a question. I have a condo that I am thinking about trying to short sell. My question is, can I be approved by the bank if I am still current with my mortgage? I was told by one agent that I need to stop paying in order to be approved.

Re: Short sale question

To qualify for a short sale, a seller generally needs to show that they've suffered a hardship (e.g., death, illness, job loss, divorce) that makes it impossible to pay their mortgage OR will make it impossible in the near future. So in other words, you have to be in default on your mortgage, or you have to show that default is imminent.

There are many people who are "upside down" on their mortgages and would like to sell, but they can still afford to keep their properties if they don't sell. Short sales (in their current form) are really not designed to assist these types of sellers. I have heard of sellers in this situation -- i.e., those who want or need to sell, but won't be able to pay off their mortgage at closing but haven't suffered the requisite financial hardship -- being allowed to sell but having to sign a promissory note at closing agreeing to pay the bank the remainder of the money (or some part of it) to satisfy the mortgage debt over time. So the seller isn't released from the debt in these cases.

With a typical short sale, the seller usually walks away without further debt or obligation regarding the property or their mortgage loan (although the seller's credit is certainly impacted and their may be tax consequences for doing a short sale, so an accountant should be consulted). A qualified short sale seller may even qualify to get money in relocation expenses FROM their lender.

As an aside: No licensed real estate agent should advise you to stop paying your mortgage. Advising such a "strategic default" is not legal or ethical (plus has negative, and potentially long-term, consequences for you), so I'd be wary of an agent who gave that advice.

Feel free to contact me if you have further questions about short sales or would like to discuss your real estate options. I am an attorney as well as a real estate agent.

Message edited 6/25/2012 10:23:50 PM.

Short sale question

Thank you. I sent you a FM.

Re: Short sale question

I have done many short sales

normally during the process with the bank- the negioator will say they need to be behind- at that point I rely that to my client

I just closed on a short sale condo last week- you can read the testimonal from my client on this site

feel free to FM me- I am very experinced in short sales-

Re: Short sale question