BEFORE YOU START YOUR SHORT SALE
Before you decide to short sale your home, there are a few things that you need to know. If you have previously consulted with a short sale expert, they should have already gone over these things with you. Short sales are a relatively new concept for most homeowners and even for a lot of real estate agents. Some agents simply refuse to deal with them (which is a good thing if they don’t have the time and resources to work them effectively). Other agents shouldn’t be working short sales because they don’t have the knowledge, time and/or resources to do them right.
One of the first things to be aware of before you short sale your home is to know what a deficiency is and how it can affect your short sale. Basically, the deficiency amount is the difference between what you owe and the amount of your sale. For example, if you owe $250,000 on your mortgage and you sell your home for $175,000, your deficiency amount is $75,000. The deficiency amount is important because if the full amount is forgiven, you could owe taxes on it the following year or, depending on your lender and your settlement, they could try to come after you in the future for the deficiency amount. Our team, which consists of a real estate attorney, has a very good track record at getting a release of deficiency but there is no guaranty. Every situation is unique.
If you are considering a short sale, you should also be aware of the foreclosure timeline. Some short sales take longer than others and you certainly don’t want to run out of time to complete your short sale. Obviously, the sooner you begin the short sale process after realizing you cannot continue making your mortgage payments, the better.
It’s also important to know what type of mortgage you have because there are programs available to help homeowners depending on their investor or mortgage type. Our team will assist you in all these matters.
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