A short sale is when a lender agrees to accept less than what is owned on the mortgage at the time the property is sold. This can generally been seen more often when there is a high amount of foreclosed properties. Many times it is in the best interest of the mortgage company to accept the short sale and save money and time to foreclose the property. It can also benefit the borrower of the property. With a short sale you can save not only the stress level of a foreclosure, but it may not have the severe impact to your credit as a foreclosure.
If you find yourself in a situation where you think a short sale might work for you please keep in mind this is not a "quick" fix. The lender will require detailed documentation from you and must also learn the present value of the property.
Will the lender forgive your shortage? They may require you to sign a promissory note agreeing to pay back the shortage. What if they forgive the shortage? It's possible this could be considered as income and be taxable by the IRS.
It's always advisable to seek out professional’s to advise you in these situations.
Visit my website at www.renaefulton.net
Renae Fulton, GRI - Opening Doors for You!
Real Estate Consultant
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