What is a Short Sale?
A short sale is when a home sells for less than the seller owes to the mortgage lender. It can be an option for homeowners who need to sell their homes because of financial difficulty, as a result of a required relocation, medical problem, job loss, divorce, etc.
What NOT to do When Considering a Short Sale
There have been companies out there who want to charge you money up front to "negotiate a short sale"-- some of these companies can be legitimate, but many are simply preying on the vulnerability of desperate home owners. DO NOT GIVE SOMEONE MONEY UP FRONT TO EVALUATE YOUR SITUATION, unless they are an ATTORNEY who is currently practicing real estate law in the state in which your home is located!
How and When Do I Pay For a Short Sale?
If done right, a short sale can be an excellent alternative to foreclosure, but you need an experienced agent on your side. We have partnered with the right attorneys and negotiators to handle your short sale so that NO MONEY IS REQUIRED UP FRONT--our fees are paid AT CLOSING, just like on all our "normal sale" real estate transactions. AND WE DON'T CHARGE YOU EXTRA... We pay the short sale attorney and short sale negotiator out of our normal listing fees.
Contact Jackie at 678-416-2326 (or email Jackie at Jackie@BestGeorgiaHomeSearch.com ) if you want to discuss whether a short sale is right for your situation.
Top 3 Things Sellers Should Know About Short Sales
Do you owe more on your mortgage than you can sell your property for in today's market? A short sale may be an option, but you will need your Lender's approval. And you should know that your lender will not necessarily "forgive" the debt--you should pay close attention to what you sign so that you understand whether your lender is writing down the debt as a concession to avoid foreclosure, or if they're writing it down as a stop-gap until they come back to you for the amount they "forgive".
Here are a few things you should know.
To get the lender to release the debt to free it for sale, you'll have to prove that you can't make payments on the property or you must move and can't pay off the full loan. You will need to give the bank recent W-2s, bank statements and tax returns, so be sure to have the necessary documentation on hand.
If the shortfall is forgiven, it won't hurt your credit as much as a foreclosure. However, you'll find it difficult to get another lender to extend credit to you any time soon. And remember, you may be required to repay some or all of the "forgiven" debt, so make sure you know what you're signing. You don't want a lawsuit to add to your troubles.
Thanks to a 2007 bill, you won't owe taxes on the amount forgiven if you're selling your primary home. But if it's a vacation home or investment property, you will have to prove to the IRS that you're insolvent (that your total liabilities exceed your total assets), or cough up the money.