SHORT SALE Information
WHAT IS A SHORT SALE?
The term "short sale" refers to the sale of a property where the property is worth less than what it is owed. In a short sale the existing lenders agree to sell the property at current value, generally writing off the borrowers loan balance.
WHY DO LENDERS AGREE TO THIS?
Banks have become increasingly receptive to short sales as the foreclosure rates have risen. Banks are not in the business of owning and re-selling homes, and the foreclosure process itself can be lengthy and expensive. Increasingly lenders realize that selling before foreclosure can be a cost effective solution.
WHY CONSIDER A SHORT SALE?
There are many reasons to consider a short sale.
- A short sale has less credit impact than a foreclosure
- With a short sale you will be eligible to purchase a new property sooner than you would with a foreclosure
- NO OUT OF POCKET COST (closing fees, commissions, and in some cases past due property taxes and HOA fees are all taken care of in the short sale)
- The ability to 'walk away' from your mortgage
SERIOUSLY, MY LENDER WILL JUST LET ME WALK AWAY?
In most cases the answer is yes.
WILL A SHORT SALE EFFECT MY CREDIT?
There are credit ramifications with a short sale, foreclosure or deed in lieu. However a short sale will have the least impact to your credit. If you are in a position where you have not been 60 days late on your mortgage, the short sale will have little effect. If you have been later than 60 days, or stopped paying your payment entirely, the effect will be greater - however in the end a short sale will still have less impact than a foreclosure.
WHAT ABOUT TAXES?
The "Debt Relief Act of 2007" provides relief from any tax liability for short sale or foreclosure on a primary residence when dealing with the original purchase money loan.
In other situations there can be tax consequences. However there is an insolvence provision within the tax code that may negate these. We would be happy to go into this in further detail with you. Of course, proper consultation with a licensed tax accountant is also advised.
DO YOU REALLY GET SHORT SALES APPROVED?
ABSOLUTELY! Devin Properties is continually closing short sales with Wells Fargo, Chase, Citibank, Ocwen, HSBC, B of A, Option 1, WAMU... and countless other lenders. While less than 17% of short sales nationwide are successfull closed, our success ratio is well into the 90 percentile!
WANT TO WALK AWAY FROM YOUR MORTGAGE?
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