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SHORT SALE GUIDE

What is a Short Sale?

A short sale, negotiated settlement, or short pay occurs when a lender agrees to accept less than the amount owed to payoff a home loan as an alternative to foreclosure. The lender usually agrees to a short sale because they know if they take the property back through foreclosure, they are going to take a much larger loss.

But My House Is Going to Foreclosure, Will I Have Enough Time?

Starting a short sale will not automatically stop the lender from starting the foreclosure process. However, we have successfully convinced lenders to postpone a foreclosure while we negotiate a short sale. While there are no guarantees, we will do everything that we can to get your home sold before the lender follows through with their foreclosure.

How Long Will it Take?

The short sale negotiation process is a lengthy one. It may take several weeks to months before a lender and home owner can reach acceptable terms. Many lenders have layers of bureaucracy, insurers and investors that we will have to maneuver through in order to get your short sale approved. We will keep you informed of the progress throughout the entire transaction.

Can We Stay in the House?

The purpose of a short sale is to get your property sold. So, you will be moving. This is not a program that can stop a foreclosure and allow you to keep the house indefinitely. It is a lengthy process and you can stay in the home until the sale is complete.

Will This Have Any Impact on My Taxes?

On December 20th, 2007, former president Bush passed "The Mortgage Forgiveness Debt Relief Act 0f 2007" which allows homeowners a (3) year window to avoid paying federal income taxes on the loss the lender takes. Before this act took affect, "If the value of your house declined, and your bank or lender forgave a portion of your mortgage, the tax code treated the amount forgiven as income that can be taxed". According to "The Mortgage Forgiveness Debt Relief Act of 2007" if you sell your home as a short sale by December 20th, 2010, the loss the lender takes will not be considered taxable income by the IRS.

Anyone considering a short sale is strongly advised to consult with legal and tax counsel for up to the minute tax and legal ramifications of this type of transaction.

What Type of Paperwork Will We Need To Provide?

The lender will require a view of your financial documents that usually include:

How Does We Get Paid?

We will negotiate directly with the bank for all real estate agent commissions. In most cases, the bank will offer the listing agent a smaller than average fee for performing the marketing and negotiation responsibilities associated with representing a seller.