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QUIZ: The Ins and Outs of Short Sales

 Are your buyers or sellers considering a short sale? These transactions can vary greatly, and they almost always involve some complications. Take this quiz to find out how much you know about these transactions.

1.What is a short sale?
When a property sells for less than its current market value.
When a listing sells for below the amount the seller owes on the mortgage.
When a listing is sold in a short amount of time.
All of the above.

2.Which of the following circumstances are appropriate for a short sale?
When a seller needs to relocate soon due to a career change.
When a seller has to move quickly into a larger or smaller home due to family issues.
When a seller loses his or her job.
All of the above.

3.Which of the following is NOT an effective strategy for owners who are having trouble paying their mortgage but don't want to be forced into a short sale?
Refinancing a mortgage loan at a lower interest rate.
Working out a different mortgage payment plan to help get caught up.
Putting mortgage payments on credit cards until one’s financial situation improves.
Requesting a forbearance period.

4.What is the first step sellers should take in the short-sales process after reaching out to their lenders?
Network with friends and family to find an interested buyer.
Get an appraisal of the house.
Hire a qualified team of short sales specialists.
Start liquidating assets.

5.Which of the following documents is NOT typically required by lenders prior to approval of a short sale?
A hardship letter detailing a seller’s finances and explaining why the short sale is needed.
A copy of the purchase contract and listing agreement.
Proof of income and assets.
The seller’s work history over the past two years.

6 .How long does it usually take a lender to review a short sale package?
Between one and two weeks.
About a month.
Between two and four months.
About six months.

7 .When is a short sale offer accepted?
When the seller accepts the offer.
When the lender is informed of the offer.
When the lender approves of the offer verbally or in writing.
When a contract is formed between buyer and seller.

8 .Which of the following is a potential downside of short sales?
The lender may demand a cut in the real estate agent’s commission.
The short sale can negatively impact the seller’s credit score.
The seller may have to sign a note promising to pay back remaining mortgage debt.
All of the above.