Don’t Foreclose On Your Property!
Most home owners in today's economy have be confronted with the fact that they owe more on their home than it is worth, as a result many banks have implemented short sale programs into their systems. These programs allow sellers with financial hardships to sell their homes for less than what they owe on the home. We have sucessfully negotiated short sales and are very familiar with the short sale programs offered by the banks. Avenue Home Realty can help you by listing your home and negotiating with the banks on your behalf for a sucessful short sale, all at no cost to you. So don't allow your property to foreclose, call us today!
What is a Short Sale?
A short sale occurs when a property sells for a price that is insufficient to pay back the loan(s) secured against it (or any other liens against the property, such as delinquent property taxes, Homeowners/Condo Association Fees etc.) as well as standard sales closing costs. In such a case, in order to complete the sale, the Seller, must either: (1) come to the closing with sufficient funds from other sources to cover these shortfalls; or, (2) the lender(s) must agree to forgive all or a portion of the amounts they are “short” or make other arrangements for repayment ( such as execution of a promissory note). This second alternative is commonly known as a Short Sale. The Sellers lender will generally not allow the Seller to receive any proceeds or otherwise obtain any monetary benefit as part of a Short Sale.
Short Sale vs. Foreclosure: Whis is the Better Option?
A short sale, where the lender agrees to take less than owed on the mortgage may not drop your FICO score as significantly as a foreclosure will. Moreover, you may be eligible to buy a home with an institutional loan backed by Fannie Mae or Freddie Mac more quickly than you would if it went into foreclosure.
Lenders encourage short sales over foreclosures because they generally net more from them, since foreclosures incur additional marketing, legal, processing and carrying costs. (For details, see Fannie Mae’s announcement 0-82.) Borrowers can be considered for loans following a short sale aftter 24 months, if the sale was caused by extenuating circumstances outside of a borrowers’ control, or 48 months if it was the result of financial mismanagement on the borrower’s part, according to Freddie Mac public relations director Brad German.
As for your tax situation: because of the Mortgage Forgiveness Debt Relief Act of 2007 and the recently passed Emergency Economic Stabilization Act, you can exclude up to $2 million of income ($1 million if married filing separately) from debt that’s discharged through mortgage restructuring, or that’s forgiven in connection with foreclosure, for the years 2007 through 2012. The exclusion must be connected with a decline in the home’s value or the taxpayer’s financial condition, and only applies to a principal residence, not investment properties. You can claim relief on your principal residence through IRS form 982. Please consult a tax advisor to find out if there may be other provisions in the law that can help you: such as, if you are insolvent when your debt is cancelled, some or all of that debt may not be taxable.
If your behind on your payment and may be facing the possibility of foreclosure, don’t sit back and keep thinking, “What can I do?” Instead, consider that short sale and take us up on our free short sale consultation before your options become more limited.
How Long Will It Take To Get A Short Sale Approved?
Every Short Sale situation is different and depends upon many different factors such as the Sellers individual circumstances, the nature of the loans and other liens against the Property, and the Sellers lenders criteria and staffing. Many Lenders will not even begin to review a Sellers request until a contract for sale has been executed, which may further delay the process. In addition, lenders will require the Seller to Provide detailed financial information and may also perform appraisals of the property to determine whether it is in fact worth less than the outstanding mortgage amount. While some lenders are able to review Short Sale requests quicker than others, many lenders take at least 5-9 weeks, if not longer.
Contact us and request your FREE SHORT SALE CONSULTATION!