The 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.
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.
Due to negative equity secured, even those who've never made a single payment or installment can avail of a short sale. A short sale is the eject button of a financial situation that's headed straight down to bankruptcy, take it when you can, while you can.
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
The basic document that contains nearly all vital info on conducting the transaction is contained in the addendum:
Origination of the contract
Date
The names and other info pertinent to the parties involved
Address
It's better if both the simple address and the legal address are listed to avoid confusion.
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. - 23159
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.
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.
Due to negative equity secured, even those who've never made a single payment or installment can avail of a short sale. A short sale is the eject button of a financial situation that's headed straight down to bankruptcy, take it when you can, while you can.
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
The basic document that contains nearly all vital info on conducting the transaction is contained in the addendum:
Origination of the contract
Date
The names and other info pertinent to the parties involved
Address
It's better if both the simple address and the legal address are listed to avoid confusion.
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. - 23159
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 X - Men @ 1:07 AM
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