What You Should Know About 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.
Also, see your accountant -the IRS may count debt forgiveness as considerable income, be wary of the tax ramifications involved. Another good reason to consult your lawyer is that the lender may still legally pursue you for the unpaid debt.
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 full process of a short sale will include a contract, an Authorization to Release Information and the addendum. A warranty deed is a tool used in the process. Let's examine the process now, starting with the contract.
The Contract: This can be laid out in a single page, or even 20 pages -any type of generic sales or purchase contract. Should the price be mentioned, it should be followed by the phrase "see addendum".
The Addendum- Your Most Important Tool
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
Names of the parties involved
The address
Tip: It's best to use both the simple address and the legal address.
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. - 23311
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.
Also, see your accountant -the IRS may count debt forgiveness as considerable income, be wary of the tax ramifications involved. Another good reason to consult your lawyer is that the lender may still legally pursue you for the unpaid debt.
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 full process of a short sale will include a contract, an Authorization to Release Information and the addendum. A warranty deed is a tool used in the process. Let's examine the process now, starting with the contract.
The Contract: This can be laid out in a single page, or even 20 pages -any type of generic sales or purchase contract. Should the price be mentioned, it should be followed by the phrase "see addendum".
The Addendum- Your Most Important Tool
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
Names of the parties involved
The address
Tip: It's best to use both the simple address and the legal address.
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. - 23311
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 Mr. Forex at
12:51 AM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home