Short Sales

In today’s economy home owners are being faced with questions and decisions they never expected. Among these are “How do we avoid Foreclosure?” and “What is a short sale?”
Fortunately we have the experience to get you the answers you need.

What is a “Short Sale”?

Simply put, it is a sale of real estate in which the proceeds from the sale are less than the balance owed on the loan.

How does a “Short Sale” work?

In a short sale, the Bank or Mortgage lender agrees to work with the seller by allowing a home to be sold for less than what is owed due to an economic or financial hardship on the part of the mortgagor. This negotiation is all done through communication with a bank’s Loss Mitigation or workout department by the seller or the sellers approved agent. Once the home is approved to be marketed and sold at a loss, Highers Group Realty works side by side with the bank to establish acceptable pricing by which the sale of the property is attempted. Once an offer is received the bank/lien holder has the final say on whether the price, commissions, or applicable fees are acceptable or not. Once a final price is accepted and a sales contract is executed the sale moves forward much in the same manner as a conventional transaction. Throughout the process Highers Group Realty is in constant contact with the banks negotiators to ensure any documentation or processing is handled accordingly.

Am I responsible for the remaining balance?

In short, no you are not. The remaining balance is a loss for the bank and you are not responsible for paying the bank this difference. Some of our clients have been told that they would be responsible for the taxes owed on the balance left unpaid. This is only part of the truth. The reality is that the bank is responsible for showing where that money went since they will be writing it off as a loss on their books. To do so they will submit to you the seller a 1099 for the balance left unpaid on the loan as income. This is normally where most consumers get nervous since the thought of now having to pay these taxes when they couldn’t afford the home in the first place can be scary. The answer to this lies with your accountant. Once you receive this document you simply need to have your accountant verify your insolvent financial position, which led to your short sale in the first place. They will submit this document with your tax returns and this will nullify your responsibility for the taxes owed on the remaining balance. Highers Group Realty has accountants we have worked with in the past who are familiar with this process. We gladly refer our clients to these accountants should they need their services regarding these matters.

What about my credit?

The impact a short sale has on your credit is significantly less than what a foreclosure will do to you. In many cases you can have your credit back in shape within a 2 year period. Compared to the 5-7 year affect a foreclosure has on your credit, this is a logical option. Highers Group Realty can also refer you to one of the reputable companies our clients have used in the past to help you rebuild your credit after the sale. This way you can get back into a home of your own sooner!

How do I get the process started?

The simplest way is to give us a call so we can walk you through the process. There are a few steps needed to initiate the process and we are here to help you with each and every one of them. Keep in mind these are time sensitive processes so the sooner you start the process the better your chances of a successful transaction.

If you think this is an option you would like to discuss, fill in and submit the form below to us today! Time Is Of The Essence! Don’t Wait!

cforms contact form by delicious:days