Short Sale
Jan 14th, 2011 by Yownz
The real estate word Short Sale came from the fact that the Lender’s payoff is coming up “short”. Short Sale happens when a Lender allows to the sale of a property that is less than the amount owed on a mortgage. Purchase and Sale Agreement (from Realtor), Addendum to Purchase (from Realtor), Authorization to Release Information, Two Years FULL Tax Returns , Two Months Bank Statements (Most recent), Last Two Pay Stubs, Fill Out Financial Worksheet, A Handwritten Hardship Letter, If FHA, Form 90036 and Homeownership Counselling Certificate include a short sale package.
With short sale, the rest of the homeowner’s debt is forgiven. Rather than suffer the lengthy and expensive foreclosure process, a homeowner agrees to a short sale though the sale of your Albany Oregon Home, for instance is less than the owner owes on the mortgage.
Foreclosure is definitely not the only option. A short sale is a better alternative. For one, a potential buyer will get the home at a reduced price. Then, the seller will not face bankruptcy but will get out of the mortgage liability. The lender on the other hand though agreed to a loss from accepting fewer benefits will not be facing the protracted process of foreclosure.
Although a better option than foreclosure, waiting for the lender to agree to a short sale can be lengthy and hard. But if you’re on the way to short sale your Albany Oregon Home, Realtors advise that you seek help from a real estate agent short sale expert. Here’s what they say:
1. Check if the indeed the Lender agrees in writing that all debts in the short sale process were forgiven.
2. Make things clear with the Lender how the short sale will be reported on your credit report. Take note that even if the short sale is marked as ‘settled for less than the full balance,’ this could still show a negative mark on your credit report.
3. Ensure that you ask your agent about the tax repercussions of short sales. So, if your Home in Albany OR was agreed to a short sale for $30,000 less, then a 1099 for $30,000 will be issued by your lender and you would have to pay taxes on.
Short Sale, as Realtors say, is a win-win situation. Foreclosure doesn’t have any credit advantage over Short Sale yet, the latter is an advantage over the former if you ever decide to buy another home.
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