North Star Title & Escrow Inc. has a staff that is solely focused on helping you get through the short sale process stress free. Our staff is experienced and trained to negotiate directly with your bank. This process can take some time and our staff knows it is crucial to keep all parties informed as to the progress. Closing a short sale takes experience, patience and communication. At North Star Title & Escrow our staff is dedicated to making your approval and closing a priority.
When negotiating a short sale North Star Title is the intermediary between a bank that holds the mortgage and the seller. We will provide the seller with short sale package that the seller must complete and provide to the bank. Depending on your bank you will also be required to provide additional documents such as tax returns, bank statements, proof of income and a hardship letter. When all documentation has been provided to the bank they will then make a determination as to the acceptance of the short sale. It is crucial that a seller discloses all possible liens that may exist on the property, such as Home Owners Assoc., equity lines, past due taxes, City Liens Code violations and unpaid water bills.
WHAT IS A SHORT SALE?
Many times a short sale is an effective way for a homeowner to sell when the value of their property is less than the remaining debt. It avoids foreclosure and allows the homeowner to move forward to a better financial future. Though it is not an easy task, for many homeowners the outcome of a successful short sale is worth the work to avoid a foreclosure.
HOW WILL THE BANK DETERMINE THE VALUE OF MY PROPERTY?
During the short sale process the bank will order a BPO “Brokers Price Opinion”. A BPO is not a formal appraisal of the property but it does give the bank the fair market value of the property. The bank uses this valuation in determining the acceptance of the purchase price on the contract.
ARE THERE TAX CONSEQUENCES?
When a short sale is completed the seller will receive an IRS form 1099 from the bank for the difference between the amount actually paid to the bank and the amount that was owed. We strongly suggest that you speak with your CPA to determine if you will have to pay federal income tax associated with the 1099. Many sellers closing a short sale will qualify for exemptions from the 1099 but the only way to be sure is to seek advice from a licensed CPA.
If you have any further questions, please contact our office, we are here to help.
Click on the link to download the package >>Short Sale Package