The Short Sale
Sometimes the owner of a property is no longer able to pay the mortgage or deed of trust. When this happens, foreclosure often follows -or worse: bankruptcy. But there is an alternative, the short sale.
The short sale is the last option taken by the lender. When a lender signs a short sale, they are forgiving a certain amount of debt, and considering the loan paid in full.
A local real estate attorney should be consulted to determine whether the loan qualifies for a deficiency judgment or claim, as state laws vary. One should also consult an accountant to determine tax ramifications. The IRS may consider debt forgiveness as income. There is no guarantee that the lender will not legally pursuer a borrower for the difference between the amounts owed and the amount paid. This depends on individual state laws.
To pursue a short sale, consult your real estate attorney if your case is eligible -certain state laws only allow specific values for a loan to qualify for a deficiency judgment in a short sale. Also, consult an accountant, the IRS may consider the unpaid debts as income, affecting your tax records. Also, the borrower is not guaranteed that the lender will not pursue them for the remaining debts beyond the debt already forgiven -an especially good reason to consult your attorney.
It's hard to guess how long securing a short sale will take, but it's sure to be long, tedious, and tiring. Lenders usually say about 21 days or so for a case to be completely approved.
Short Sale Strategy Overview
The process: The contract, authorization to release, and the addendum -these are the key parts of the whole short sale process, topped off with the warranty deed. Here we'll take a closer look at the contract and the addendum:
The Contract: The contract can be of any variety-a one page, a nine page, a board of realtors' version, or any generic type of purchase and sales contract. However, at any point in the contract in which price is mentioned, you should fill in the phrase: "See Addendum."
The Addendum
This is the most important piece of paper in your entire manual! Let's review the Addendum in detail. The first section on the top is just generic information pertinent to the specific property:
Origination of the contract
The Date
The names and other info pertinent to the parties involved
Address
It's better if both the simple address and the legal address are listed to avoid confusion.
Any investor, who wants to make money in the foreclosure market, should always consider that a short sale could still bring him a bargain property. - 23210
The short sale is the last option taken by the lender. When a lender signs a short sale, they are forgiving a certain amount of debt, and considering the loan paid in full.
A local real estate attorney should be consulted to determine whether the loan qualifies for a deficiency judgment or claim, as state laws vary. One should also consult an accountant to determine tax ramifications. The IRS may consider debt forgiveness as income. There is no guarantee that the lender will not legally pursuer a borrower for the difference between the amounts owed and the amount paid. This depends on individual state laws.
To pursue a short sale, consult your real estate attorney if your case is eligible -certain state laws only allow specific values for a loan to qualify for a deficiency judgment in a short sale. Also, consult an accountant, the IRS may consider the unpaid debts as income, affecting your tax records. Also, the borrower is not guaranteed that the lender will not pursue them for the remaining debts beyond the debt already forgiven -an especially good reason to consult your attorney.
It's hard to guess how long securing a short sale will take, but it's sure to be long, tedious, and tiring. Lenders usually say about 21 days or so for a case to be completely approved.
Short Sale Strategy Overview
The process: The contract, authorization to release, and the addendum -these are the key parts of the whole short sale process, topped off with the warranty deed. Here we'll take a closer look at the contract and the addendum:
The Contract: The contract can be of any variety-a one page, a nine page, a board of realtors' version, or any generic type of purchase and sales contract. However, at any point in the contract in which price is mentioned, you should fill in the phrase: "See Addendum."
The Addendum
This is the most important piece of paper in your entire manual! Let's review the Addendum in detail. The first section on the top is just generic information pertinent to the specific property:
Origination of the contract
The Date
The names and other info pertinent to the parties involved
Address
It's better if both the simple address and the legal address are listed to avoid confusion.
Any investor, who wants to make money in the foreclosure market, should always consider that a short sale could still bring him a bargain property. - 23210
About the Author:
Know about short sale an alternatives to bankruptcy or foreclosure only at Don Burnham's website http://www.weknowthewayback.com. Visit today to know all about short sale!
posted by X - Men @ 12:41 AM
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