The following guide may help you with some commonly asked questions regarding short-sales.
Short Sale Guide A printable version is available to clients.

Why Use a Real Estate Broker?

Typically mortgage lenders will only work real estate agents and brokers in the process of a short-sale. The lender will want to know that your property is on the market and that your property will have the opportunity to reach the "highest and best" exposure and thus the higest possible offer.

What is a Short-Sale?

A short sale is a process of procuring an offer on a piece of real estate prior to or during the pre-foreclosure process. Many sellers solicit the services of a Realtor or attorney to help with this process. The process of a short-sale is to settle the debt or mortgage obligations associated to a piece of secured real estate prior to loosing the property in a foreclosure. There can be advantages of a short-sale versus a foreclosure, some of which are illustrated later in this manual.


Why Conduct A Short-Sale Versus Foreclosure?

Short-Sales are becoming more and more popular. Typically there are three stages of Foreclosure, 1) Pre-foreclosure, 2) Foreclosure, and 3) Post-Foreclosure. We will explain the different stages and their meanings in a moment, but a Short-Sale is typically conducted for the following beneficial purposes:

• Short Sale Benefits
o Lender may settle debt for less than owed
o Write-off on credit versus a foreclosure, which could help by not affecting your credit with a foreclosure or bankruptcy
o Avoid the aggravation, headaches and humiliation of legal proceedings and filings in your local courthouse, which become permanent public records for everyone to see.


What is a Pre-Foreclosure?

A Pre-Foreclosure, is the process of you as a borrower or homeowner receiving a legal complaint from your lender. The complaint names you as a defendant and you will have certain rights and obligations, the advice and counsel of an attorney is highly recommended. This is the stage and point, where sellers should also seek to renegotiate with their lender more favorable loan terms and payments to stay in the home or if the seller would like to move out of property, to seek the assistance of a licensed Real Estate Expert who is a Short-Sale Specialist, such as Roger Sexton & Associates with RE/MAX Unlimited, Realtors, in Cincinnati, Ohio. By hiring our team early on and at the onset, you assure yourself of a reasonable effort and allowable period of time for us to market your home and procure an offer from a ready willing and able buyer.

What is a Foreclosure?

A foreclosure is a process of the lender taking the real estate back that was used as security for the mortgage because of default of borrower’s obligations of their mortgage. A borrower/homeowner has certain rights in any foreclosure process and should seek the assistance of legal counsel when they receive any legal proceeding notices or a complaint filed by their bank. The process of foreclosure cleanses the title of a property by removing any mortgages of record and/or mechanics liens. There are certain limitations; it is highly advisable to seek the assistance of an attorney regarding your obligations and rights associated to this process. The foreclosure process is when there is a Sheriff’s Sale date established for an auction or sale of your property. Your property is typically sold to the highest bidder. The borrower’s lender typically sends a representative from their institution or a firm representing their interests to the sheriff’s sale, most properties are purchased back by their respective lenders.

What is a Post-Foreclosure?

The post-foreclosure stage is where the lender is in the process of receiving a Sheriff’s Deed from the Sheriff’s Sale. This can take up to 30-60 days from the period that the property is purchased back. The previous owner/borrower may still have rights and may still be able to purchase the property back under the local laws. Consult an attorney for more details. If a foreclosure is successfully conducted by a sheriff’s sale or auction, you may have a foreclosure on your credit for up to 7 years which could prevent you from obtaining any type of financing for consumer goods, automobiles, or a new home.

What You Can Do!

Hire a professional real estate agent or broker who has the experience of working with and negotiating on behalf of other sellers and who has created a proven track record of success with short-sales. A short-sale is typically not your only remedy, but it certainly is the best remedy for preventing a foreclosure and is generally the best option if you are wishing to no longer live at the property.

There are many real estate agents who have been in the business for years, and many which have diverse experience and interaction with negotiating contracts. Your agent must be familiar with the labyrinth of details associated to the short-sale process. Roger Sexton has created a Short-Sale Package and Roger will personally guide you through the process of completing these forms and the checklist.

You will be assigned a Short-Sale specialist on Roger’s team. This specialist will work with you with weekly updates and progress reports regarding our attempts to work with your bank.

The first and best step considering the above is to hire our team and allow us to get started early in the process…

Our Fee

Our fee is typically paid for by your lender. There is no cost to you for our services. You will agree to allow us to list your home, we’ll assist you in completing the Short-Sale Package, and you will essentially turn over the aggravation of selling your home to Roger Sexton and his highly skilled team of short-sale professionals.

Your bank pays our fee. If your bank were to purchase your property back at a Sheriff’s Sale, they would later hire and employ the resources of an REO real estate broker and pay them a fee to do the same. Banks are more motivated to work prior to a foreclosure to workout favorable terms for a quick and timely sale and most will pay our fee without anything due from you!

For a personal consultation call or email Roger Sexton at Roger@RogerSexton.com or 513-484-1000 Ext 2.

Your Obligations / Things You Need To Know

With Your Credit – Your credit is affected by what information is posted to the three major credit bureaus. Typically your bank will place “write off” or “charge off” in lieu of a foreclosure on your credit, this can be not as damaging to your credit as a full outright foreclosure or bankruptcy posting.

With Your Bank - While our fee is typically covered 99.9% of the time. We do our best to settle the loan without any further due from you after the closing. Your obligations are still to attend closing to sign off on the deed once we have successfully sold your home. You will typically never receive any proceeds from the sale of your home as your lender is taking a hit and will not allow any proceeds to go to any borrowers. You may receive a 1099 from your bank, this is the one time you will want to hire a CPA in order to see how you can or may discharge any tax obligations if you have suffered a financial hardship. A 1099 will more than likely be issued by your bank within the first year that proceeds the sale, you typically will have no further loan obligations for your mortgage unless otherwise agreed to in writing between you and your bank.

With your CPA/Accountant – You will want your accountant to look and do your taxes. This is very important, if any year you hire a CPA, this is the one year you will want to hire a CPA tax professional to assist you with your tax options.


Additional questions? Please e-mail Roger directly at Roger@RogerSexton.com

Legal disclaimer: The abovementioned is not legal or advice which you should materially rely upon. Your specific situation may vary and is solely based upon your lenders policies regarding how Short-Sales can be conducted. Your mortgage lender may work differently than within the scopes and definitions illustrated herein. You should consult an attorney regarding your legal obligations, liability and rights connected to any real estate mortgage you have signed. For tax liability you should consult a Certified Public Accountant.

For any real estate matters, you should retain the services of Roger Sexton with RE/MAX Unlimited, to assist you with a Short-Sale, we would be happy to provide our services, your bank normally pays for our fee, a Short-Sale avoids foreclosure. Contact Roger for more details. Last updated: February 26, 2008