Maryland Short Sales

Behind on your mortgage payments?


A short sale is the sale of real estate where the net proceeds fall short of the debts secured by the lien. The lender against the property can approve the sale of the property and accept less than the amount owed on the debt.

Facing foreclosure can be overwhelming and scary, but by taking the right steps you may be able to save your credit and wake up from the nightmare you may be experiencing today.

In order to help Maryland Homeowner facing a Foreclosure, we compile a list of the most frequent questions about short sales

 

23 Questions and Answers About Short Sales in Maryland

Q: What are the Maryland short sale laws?

A: Effective July 1, 2013, Maryland enacted a law that regulates individuals and entities providing services in “short sale” transactions.  The new law is named the Maryland Mortgage Assistance Relief Services Act (“Maryland MARS”).  Essentially, this law stops unlicensed Real Estate Agents helping an owner negotiate with a lender/lien holder to achieve approval for a short sale or a release of a lien and subsequently the waiver of a deficiency; or to otherwise avoid a foreclosure proceeding. This protects the consumer to deal directly with licensed professionals that have experience in doing short sales.


Q: How long does a short sale take in Maryland?

A: After hundreds of short sales completed, they are like snow flakes, there are no two alike. I had them take as little as 30 days and as long as15 months or more!... You have to understand that in a majority of short sales situations the bank/lender you are dealing with is probably not the owner of the mortgage and they are simply facilitators. The bank/lender is the servicer and to make matters more complicated, a separate investor owns the mortgage. Becuase of this, a short sale can be frustrating at times, but as a true professional will never give up in getting a short sale approved.

 

Q: How to hire a short sale Realtor in Maryland? 

A: The Short Sale option allows you to list and sell your home for its current market value, and the bank forgives the unpaid balance of your mortgage.  For this, you must hire a real estate agent first, as a requirement from the Lender.  You should seek and hire a Realtor that creates a win/win situation for you and the bank. You want someone who has experience and the main question you should ask first is: How many short sales have you completed? - Ask them to email you the list and go from there.

Note: You want to know how many short sales the agent has completed? ...not their company!

Q: How does a short sale agent gets paid? 

A: The short sale agent that you choose to represent you,  will get paid 100% by the lender that gives the approval. The seller pays $0 at closing for commissions. 

Q: How much is going to cost me to do a short sale in Maryland? 

A: Yes,  all the commissions are paid by the lender...however, homeowners may be required to pay HOA fees due, other third party liens, a resale package for the buyer(s) and most importantly, the seller must pay all required utilities on the house. The house must have all utilities on in order for the buyer to complete a home inspection.

Q: Do I have to fix my house prior to selling it as a short sale? 

A: The answer is NO. You will be selling the house as a short sale, AS IS and any required repairs will have to be completed by the buyer(s) if this is required. In some cases, your lender will pay for repairs, if they can be persuaded by the negotiator helping you.


Q: Ok, now tell me about the short sale process in Maryland

A: The short sale process as it applies to you consists of these steps: 

1. Seek for a professional real estate broker to guide you through the early part of the process.

My recommendation to my clients is after reviewing their application of a short sale, to help them be fully prepared before contacting the lender. 

As the borrower, you should: 

· Gather your mortgage statements.
· If you have a 2nd mortgage include this as well.
· Include all monthly debt obligations such as car loans, credit cards, etc.
· Provide proof of current income.
2. Now Let's Contact Your Mortgage Company
· Call to book an appointment with a loan officer.
· Explain you are interested in a short sale.
· Ask for their short sale package
· Bring any additional information they have requested.
3. Include Financial Hardship Statement
· Draft a to-the-point letter outlining the reasons for your financial issues. (if needed)
· Explain why you are unable to honor your debt.
· Explain you prefer to short sale your home to avoid foreclosure.
· Ask for their understanding and assistance.
4. Introduce your  Licensed Real Estate Professional to start the process
· Fully disclose all pertinent financial information on your home.
· Disclose all mortgage holders and lien holders.
· Request a CMA of your home.
· Price the home at current market value.
· Make the sale process as easy as you can by following your agent’s advice at
all times.


Q: How to do a short sale on your home?

A: A short sale is not a quick sale. It takes time to receive the approval required to sell your property. To begin the sales process, your role as the seller is just to hire the right person to represent you from day one... and that person will know exactly how to do the short sale of your property.

Q: What happens during a short sale?

A: It is almost the same as a traditional listing. You will allow visitors (buyers) into your house, your agent will encourage them to write an offer, depending on the offer, you will accept it as written. Your agent then will submit the offer to the lender and together with an attorney, negotiate the approval of the sale with your lender.

At closing, it is exactly the small as a closing form a traditional sale...with the exception of the approval document produced by the lender...that you must accept and sign.


Q: Why would you do a short sale?

A: Because you have insolvency on your finances. You must prove to the lender of your inability to pay down, and/or to pay off your mortgage. You must prove you owe more money than you have in cash.  A short sale is not a right you have from your lender, your lender will ultimately decide if they would approve a short sale based on your circumstances.

A short sale is not a right you have from your lender, your lender will ultimately decide if they would approve a short sale based on your own circumstances.

If you are in distress and have difficulties paying your mortgage, a short sale then would be a good option for you.

If you have  1/2 million dollars in savings, a great paying job and no hardship...a short sale may not be the right option for you. 

Q: What happens when you do a short sale on your home?

A: If successful, you sell it, and owe the bank $0 

A short sale is basically a regular sale, with the exception of the approval from your lender. You are selling your house...not losing it! 

Q: What are the advantages of a short sale vs foreclosure?

A: One of the most important things is that you will be received of your mortgage...so you can later be eligible, under Fannie Mae guidelines, to buy another home in 2 -3 years instead of 5 to 7 years if you allow a foreclosure to take place on your house. 

Remember: In a short sale, you sell your house...on a foreclosure, you lose it! 


Q: What is the Mortgage forgiveness debt relief act short sale?

A: The Mortgage Forgiveness Debt Relief Act of 2007 generally allowed taxpayers to exclude income from the discharge of debt on their principal residence. This act was extended several times throughout the years until 2014

Debt reduced through mortgage restructuring, as well as mortgage debt when is forgiven in connection with a short sale may become taxable as per IRS rules. You must contact an accountant to get the right answers based on your particular case. 

Q: What is the difference between a Short Sale vs Foreclosure?

A:  As per our early answer. In general, under Fannie Mae guidelines, you can buy another home in 2-3  years instead of 5 to 7 years if your house was foreclosed.

Remember: In a short sale, you sell your house...on a foreclosure, you lose it! 

Your credit rating will also be severely impacted if you have a foreclosure instead as opposed to a short sale.


Q: What are the pros and cons of a short sale vs foreclosure?

A:  The Pros & Cons Short Sale Vs Foreclosure

#1  Ability to obtain a mortgage in the future

Short Sale: 2-3 years    Foreclosures:  5-7 years

#2 Effect on your credit score

Short Sale: Significantly less than what a foreclosure will do to your credit score. This depends on a lot of factors but always, with a short sale... your credit score will be less impacted. 

#3  Security Clearances

If you work for the Government or will need to have a security clearance anytime in the future. A foreclosure should be avoided completely.

#4  Your Current and Future Employment 

Short sales are not reported on a credit report and if future employer requires a full disclosure of your credit report, foreclosures most likely have a huge impact whether  you get the job or not

#5 Deficiency Judgement 

Your lender may demand payment from you after a foreclosure by imposing a deficiency judgement on your finances. This is the main reason why you should do a short sale, to get the lender to FORGIVE YOU the difference of what you owe to the bank and what you sell your house for. This is how I measure if a short sale is successful or not.

 

 


Q: What is the short sale vs foreclosure credit impact?

A: As stated, this will be different with every case. It depends on a lot of your financial factors but always, with a short sale... your credit score will be less impacted.

 


Q: When should you be thinking about short selling your home?

A: The first time when you feel the burden of the monthly mortgage payments to your lender. Don't make the mistake of spending all your savings, selling all your personal items and be absolutely broke. Being broke is NOT A REQUIREMENT to do a short sale! Call me to discuss your actual case before deciding. I'll give you my personal number 240-426-5754. I can help you with a short sale in MD, DC and VA. If you live outside my service area, go ahead and call me as well, I know you may need help...and I will recommend someone to you. 

Q: How can I find short sale Realtors near me?

A: There are a lot of agents claiming to be experts in Short Sales but don't know how to even handle the process of approval when it comes time... The best way is to ask local agents how many short sales they have sucessfully closed in past year and start from there.


Q: Should I choose a Realtor short sale specialist?

A: Yes, you should. There is really no charge to you as a seller to hire the best person available...After all, their results could affect your financial future and peace of mind. Any real estate agent could "initiate a short sale...experienced agents finish them.

Q: What is a certified short sale specialist?

A: In 2008, there was a company that certified real estate agents with the designation of CDPE. They were the most pro-active company back then. Today? I'm not sure if they are still around but suffice to say that experience on the number of short sales completed counts a lot more than a short curriculum about short sales to obtain a designation.


Q: Where to find real estate agents specializing in short sales?

A: Please refer to my answer to the question above. 


Q: What is a short sale specialist job description?

A: Someone who has a thorough understanding of complex issues about short sales. Someone who has knowledge of foreclosure avoidance options available to homeowners and resolve under any circumstances a positive outcome favorable to the homeowner.

 

Q: Is there a short sale agent finder? 

A: Short sale agent finder works under one premise. To receive a referral commission from the real estate agent who subscribes to them. Companies that are in the business of selling leads to real estate agents provide these finders online. Hardly a proper method to find the most qualified person by trade. Anyone who is willing to pay could subscribe to these short sale finder services, experienced or not!

Finally, if you are asking yourself...


Where are the short sale experts in MD?

or perhaps you want to know...

Where can I find a short sales specialist in Maryland?

May I introduce to you about our specilaized short sales services for Maryland homeowners. Please call me at 301-246-0001, email me at Fernando@ReallyNiceHomes.com or click on the image below for more information about short sales in Maryland.