Short Sales are all the buzz in the real estate world right now, but whether they’re right for a given homeowner is another question altogether. It’s important that you understand the benefits, the pitfalls and the legal and tax implications that come along with a short sale.
What is a Short Sale and Can Anyone Do One?
A Short Sale is a contract between a buyer and seller in which the Seller’s lender is approving an agreement to settle the
homeowners note for less than the full amount owed. This is typically done in markets where the homeowner owes far
more on the loan than the property is worth on the open market.
In a word? No. You must be able to qualify for a short sale through documented financial hardship. Short sales are not
easy and should be handled only by MOTIVATED sellers and experienced Realtors. Short sales also have financial
and legal implications, so specialists in those fields should also be consulted.
Distressed Market
24% of homes sold in 2010 involved distressed mortgages of some sort. So literally 1 in 4 sales were either foreclosed, short sold, or auctioned as a result of loan default or slow payments. Distressed owners should consider all the options available to them: loan modification, leasing, short sales and auctions are better solutions than having a home go to foreclosure.
Loan Modifications
The HAMP loan modification program by and large has been a failure. Only 1 in 4 modifications make it to the trail stage, and then only 1 in 10 actually succeed. A home must be able to appraise for more than what is owed to qualify which is why many homeowners turn to short sales to sell their properties.
Downloadable Version
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Is a Short Sale Right For Me
