The Short Sale In A Nutshell
12:26 AM
When an owner can longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure. One of those options is called a 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.
The amount of time for a short sale to get approved is difficult to guess. In other words, the short sale process is long and tedious. The lenders in short sales business usually say that it takes 21 days time for the approval to come through.
Short sales are not just meant for the nonpayer's but those who have never made a single installment can make a short sale, due to the negative equity that they have for the present. It becomes easy for an individual to short sell the house and get out of the rough financial situation.
Short Sale Strategy Overview
How the Short Sale works:
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- 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
Date
Names of the parties involved
The address
Tip: It's advised to list both the legal address and the simple address in the addendum -for the purposes of clarity and transparency.
Any good investor should be aware that a short sale is a good way to peruse quality bargain real property -a case in which a short sale is actually more financially reasonable than outright foreclosure.
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.
The amount of time for a short sale to get approved is difficult to guess. In other words, the short sale process is long and tedious. The lenders in short sales business usually say that it takes 21 days time for the approval to come through.
Short sales are not just meant for the nonpayer's but those who have never made a single installment can make a short sale, due to the negative equity that they have for the present. It becomes easy for an individual to short sell the house and get out of the rough financial situation.
Short Sale Strategy Overview
How the Short Sale works:
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- 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
Date
Names of the parties involved
The address
Tip: It's advised to list both the legal address and the simple address in the addendum -for the purposes of clarity and transparency.
Any good investor should be aware that a short sale is a good way to peruse quality bargain real property -a case in which a short sale is actually more financially reasonable than outright foreclosure.
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!
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