The word ‘foreclosure’ strikes fear into the hearts of millions of homeowners across the country. An estimated 31.4% of homeowners in America are underwater, and these circumstances limit their choices in many ways, including their ability to take jobs in other areas. A significant portion of these homeowners are also have difficulty making their payments, meaning they are not only locked into their debt, they are in danger of losing their homes and destroying their credit.
Luckily, there’s another option — a short sale. A short sale is a legitimate method to halt foreclosure proceedings and get out of a bad debt situation without undue damage to their credit.
There are many misconceptions about short sales floating around: for starters, you do not need a lawyer, you do not need to be actually facing foreclosure or even behind on your payments. Although every situation is different, the upside generally outweighs the downside.
Another popular misconception is that your lender has no interest in a short sale. Generally speaking, this is untrue. Of course they do not want to do too many short sales, but a short sale is often cheaper than foreclosure, so your lender might be amenable.
The best outcome of a short sale is where your lender ‘forgives’ the balance of the loan between what you owe versus what the property sold for. However, this is not automatically the case, so you should be sure to find experienced and knowledgeable assistance. There is also the matter of taxes, and the tax laws are far too specific to go into here– we’re merely bringing it to your attention so that you will know to ask your realtor about it.
Again, experienced help is a must, because if you are facing foreclosure, you only have one chance to salvage the situation through a short sale. Even if you are not facing a foreclosure, the current Democratic administration has introduced favorable measures to get banks to release homeowners from their obligations, but come November who knows how that will change?
To explore whether a short sale is right for you, call us today at 703-485-HOME or by email [email protected].
703-485-4663
