Top 5 questions that home sellers ask about short sales:

1. How much will it cost to sell my home? The seller doesn’t pay the Realtor.  When the bank accepts the short sale, they will pay for the commission for both the listing and buyer’s agent.  There are some agents who may ask for a fee upfront, or a fee to pay for a 3rd party, but it isn’t the norm.
2. What if the bank won’t talk to the seller about a short sale? This is heard frequently by Realtors.  The homeowners has called the bank, trying to be proactive and are sometimes not late on their payment (yet).  Most banks will work with a homeowner once they realize that the homeowner is serious and in real financial trouble.
3. What are the financial consequences? Homeowners won’t be sent a 1099 – this is for Federal only.  In California, there has been no ruling on the state tax ramifications.  Talk to a good Real Estate Tax attorney or your tax person.
4. How does a real estate agent proceed with a short sale? A local short sale specialist will do a Comparative Market Analysis to show you the recent listed, pending and sold properties in your neighborhood.    The home needs to be competitively priced.  Pricing your home  too low will not guarantee that the bank will accept the offer, even if you have multiple offers.  The home must be priced competitively.
5. Do I have to move out of the house to sell it? No, you can certainly continue to live in the property.  There are homeowners who do want to find a rental prior to their credit being a mess.