Short Sale Frequently Asked Questions
If a seller of a short sale already has a fully executed contract with a potential buyer and the seller has not obtained the lender's approval for the short sale and now another buyer has made an offer that is better. May the seller sign the second contract?
The seller may sign a second contract but should do so only as a backup contract with the appropriate backup contract addendum attached. If using a FAR contract, use addendum P(1) from the FARA-9 Comprehensive Addendum. Of course, the FAR SSA-2 Short Sale Addendum should also be used.
What will a short sale deficiency do to my credit?
Short sales will affect your credit standing between 1-3 years. A Deed-in-lieu of foreclosure will affect your credit for 3-5 years and a foreclosure between 7-10 years.
How can I prevent the lender(s) from coming back after my assets once I conclude a short sale?
The best solution would be to get the lender(s) to grant a deficiency waiver. This way there is no recourse ever from the lender(s). The next best solution would be to negotiate a discount to the deficiency. If the deficiency is $50,000, the lender may agree to 90% discount or $5,000 to be paid over a term of 10 years at 5% interest with an unsecured note.