A short sale …
….is not an exception anymore. There has been plenty of talk in the media about short sales, and sometimes it seems the short sale is the easy way out. Not really! Don’t expect a short sale to solve your financial problems! And remember: No hardship, no short sale! Even if you get your short sale approved, it might not be the end of all your financial woes.
Keep in mind:
- A short sale can cause tremendous stress on you and your family
- A short sale involves extensive paperwork. You’ll have to be on board pulling it all together, while a real estate professional can guide you, you will have to do the work. Start collecting all documents as early as possible.
- A short sale may take a long time. Once your home has received an offer, you can begin the process with the bank, but it can take months to have your short sale accepted. However, there are attempts to reduce short sale times, but most still take several months to be accepted.
- The forgiven debt amount is considered income, unless you qualify for the Mortgage Forgiveness Debt Relief Act. If your short sale did not close by the end of 2012 , this is when this act expires, you will have to pay taxes on the debt that was forgiven. Be sure and consult your attorney and your tax professional about this.
- You may be asked by the lender to sign a promissory note agreeing to pay back the amount of your loan that was not paid off with the short sale. Talk with a real estate attorney about your options.
- Your credit score will suffer when you sell your home via a short sale.
Contact me if you have more questions. I’ll be happy to meet with you to evaluate if a short sale is good for you.