Short Sales vs. Foreclosures

The Alternative to Foreclosures - Short Sales

A far as real estate transactions go a short sale is not a very pleasant transaction either but it could be a better option than bankruptcy or foreclosure.

Signing away the rights to your home in a foreclosure proceeding can have lasting effects on a family the home owner loses their credit rating and is unable to restore this for as long as a three year period. A short sale can actually save a home owner from having to undergo the further indignity of losing their credit score.

Because of the economy right now in our country home owners are choosing to sell their Tri-Cities real estate by way of Short Sales. In California agents are reporting that more than half their listings are due to short sales.

But the seller themselves do not have the authority to sell their own property in a short sale. The permission has to come from the lender of the loan. The lender will agree to sell the home in a short sale but it also means that the lender is agreeing to probably take a loss on the property.

Not to say that they excuse the balance outstanding, the home owner is generally still held liable for this unless in case of extremely extenuating circumstances. Many lenders agree to a short sale but not to discounted pay-offs, while many other lenders will not even agree to a short sale, as not all Tri-city real estate or sellers qualify for a short sale.

It is highly recommended that any home owner considering the possibility of a short sale, seek legal advice from a real estate lawyer. This is because the drawbacks can often out weight the benefits. An accountant should also be consulted to look into the tax implications of a short sale as the IRS might consider debt forgiveness as income.

There is also the possiblity that the lender will still hold the balance of the unpaid debt to the sellers responsibility and many US states allow deficiency judgments in matters such as foreclosure and short sales. Only a lawyer will be able to judge if the lender has a deficiency claim against the borrower.

In a short sale the lender is going to require a great amount of detail from the future buyer. Even though each lender is different its best to be prepared if you are going to start the short sale process. It might take you a few calls to determine who is responsible for short sales purchases from your lender, but they will also be able to provide you with details of the information they require.

If you are considering a short sale or foreclosure for your Pasco, Richland or Kennewick real estate, don't hestiate to call me today. We can go over options and dicuss the possiblities you may have.