Military short sale FAQS may be the life-ring needed for the underwater mortgage.

If you have an underwater mortgage read the faqs below and see if our Military Short Sale Attorney/Real Estate Team can help you get rid of tens of thousands of deficiency.  We sucessfully compete these sales everyday so do not hesitate to ask questions here.


See Our mention in the Virginian Pilot article regarding military short sales

Military Short Sale FAQs:

FAQ - What is a short sale (defined):  

Military Short Sale FAQs

ANSWER - A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens’ full amounts. Whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt.   Any unpaid balance owed to the creditors is known as a deficiency.  (Read more about deficiency below).

FAQ - Do I qualify for a military short sale? (Hardship)

ANSWER - Banks, lenders, credit unions may vary in their requirements. First you should consult with a Real Estate Attorney experienced with your or other lenders.   The consult should be free.

1.     If you are PCS’ing (Permanent Change of Station orders) then your hardship is already defined.

2.     Other hardships include divorce, job loss, and medical expenses or potentially travel time to work where your command requires you be closer and on call.

FAQ - Do I have to be delinquent to do a military short sale?

ANSWER - No. and we recommend you consult with our attorney's office about paying your mortgage and other bills.  

Military Short Sale FAQs:

FAQ - What Is the Time-line to complete a military short sale? (Patience required)

ANSWER - Our experience with military short sales is that you can expect 4-6 months for the process to complete (average). Some can be faster, some can be longer if issues arise. The faster we get a contract, the quicker the process.  A sample timeline follows: 

  • Contact your REALTOR® here with any questions.  Do the free consult with the Real Estate Attorney’s Office ASAP.  Once you are comfortable with the “legal” side of the process then contact your REALTOR® to list and prepare the home for sale.
  • Provide the Attorney’s office any documents requested ASAP.  REALTOR® puts home in the Multiple Listing Service, recommends items to help the home show better, markets via blog, social media, and more, sets up appointments, follows through for feedback on showings.
  • Once a contract is obtained on your home, your REALTOR® negotiates with the buyer’s agent and presents options to the seller (you).  REALTOR® recommends any counter-offer options, inspection/repair items requested, and more.  Generally, short sales are "AS IS" to the buyer.
  • Once the contract is ratified (all parties agree to terms) it is submitted to attorney’s office for submission to your lender(s).  The Attorney’s office will most likely request more updated documents from seller and agent(s). The Attorney’s office will spend countless hours emailing and phone calls to represent your interests and expedite approval(s).  The lender normally takes 45-90 days to complete their decision. Some lender are faster, most slower.
  • Bank/Lender receives contract from attorney’s office and starts the process which includes ordering a Broker Price Opinion (BPO) and/or just an appraisal of the seller’s property.  The BPO and Appraisal are to ensure the property is marketed and sold at or near market value.
  • Lender schedules appraisal to determine “market value” using comparable properties nearby.  Your REALTOR® attends appraisal to provide any input needed.
  • Lender reviews appraisal and notifies attorney on acceptable price for the property.  If offer price in-line with offer, then all is good.  If bank/lender require a higher offer price then your REALTOR® must go back to buyer’s agent and present the counter-offer.
  • Once the price and terms are accepted by the prospective buyer then the property is scheduled for closing.  Closing is normally 45-60 days after lender issues approval letter.
  • During the period after bank/lender approval and prior to closing there may be some inspections to be completed such as home/termite/moisture.

Military Short Sale FAQs:


FAQ - Starting the Military Short Sale process – What is important?

ANSWER – Many items should be considered but:

  • Consult with our real estate attorney where you obtain legal counsel and tax advice.  Complete paperwork requested by the Attorney’s office.
  • Who pays the REALTORS® commissions, closing costs, and other fees?   The bank/lender covers these costs but may not pay for any unpaid POA/HOA fees. 
  •  Upfront fees?  Your REALTOR® does not charge an upfront fee and will list and market your home after your consultation and engagement with the Attorney. 
  • Note:  We do not accept short sale listings without the engagement of the attorney.  There is too much work required to get this “legal” process completed promptly and correctly. Your attorney has the expertise and contacts to represent you best.

“Keep in mind that this is a complex procedure and not a Target Credit Card”

FAQ - Best time to start the military short sale process? 

ANSWER - Our experience is that it will take 5-7 months in most cases, maybe longer in some instances. The sooner the better so you do not get stuck with a mortgage payment after moving.

Will My Credit be Affected?

FAQ - What happens to my credit? 

ANSWER -  This varies for each individual and based on several credit considerations.  Some have a minimal impact on credit and others more.  Ask the attorney's office.  

FAQ - Is a short sale better than a foreclosure for the bank/lender?

ANSWER – See why below:

  • Yes as it usually more cost prudent for the bank/lender to short sale rather than foreclose and own the property, absorb legal costs, re-market the real estate, and go through all the other “pains” of owning a home they did not want.
  • Should you stop making mortgage payments?  No as this will definitely cause major harm to your credit score. Note:  this can vary from lender to lender - consult with attorney's office.

FAQ - What happens to my VA loan eligibility if I do a short sale on my VA?

Answer:  you will still retain your loan VA loan eligibility but whatever amount is forgiven from the short sale (VA compromise sale) will be deducted from your future loan eligibility.  Example: if you have $20,000 forgiven in your compromise sale, instead of being eligible for $458,000, you are now eligible for $438,000.  This is an example and the VA may change guidelines so consult with the attorney's office.  

Military Short Sale FAQs:

FAQ - Am I guaranteed my military short sale will be approved? 

ANSWER - We make every effort to ensure a successful conclusion and short sale.  However, we cannot guarantee positive results. Keep in mind that the military short sale process involves the mortgage servicer, the investor(s), and the mortgage insurance/guarantor.  This is where the attorney’s office uses their expertise to weave through the multitude of dotting the “i’s” and crossing the “t’s”.

Waiver of Deficiency

FAQ - What is a waiver of deficiency”?

ANSWER:  Lien releases are not a waiver of deficiency. A home-equity (HELOC) or any type of second mortgage, you have will require documentation/letters ensuring the deficiency is waived.  Make sure you understand that if your approval letter only releases the lien, and does not include the deficiency, then your deficiency has not been waived. This is why we use an Attorney for all our short sales.   The process is a complicated legal matter and you need to be protected.  Talk with our Attorney’s office.

FAQ - My family wants to buy my house being short sold - can they?

ANSWER:  Typically NoBanks/lenders normally require all parties to sign an Affidavit of Arm s Length Transaction. Banks/lenders are not favorable towards sales to relatives, businesses where parties have an interest, etc.


Military Short Sale FAQs:

Summary – Pitfalls?

FAQ - What are the most frequent pitfalls when doing a military short sale? 

ANSWER - Best answer:  Putting off or delaying the start of the process, not engaging the attorney’s free consult so you know the facts and impact, and not being pro-active with paperwork when requested as the Attorney’s office must meet certain bank/lender time-lines.

Now that you have read the Military Short Sale FAQs -  Thinking of selling your home via a military short sale?  Contact Dennis Blackmore at (757) 343-4949 or use this contact form.  We specialize in this type of sale.