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Short Sale Solution

These have been difficult times in the real estate market and in our general economy. Although there is some stabilization in our markets from the freefall we experienced, we are still not on solid ground and there is no legitimate hope of a housing recovery that will help families out of this situation within the next couple of years. A short sale is usuallly the best remedy for situations where more is owed on a home than what it is worth. There are a variety of reasons people find themselves in this situation. Usually, I can help.

In 2010, the majority of Real Estate sales in our area will be short sales. These homeowners are facing the looming threat of foreclosure. This is highly damaging to individual’s credit, has dangerous tax implications, and may exclude owners from purchasing again for another seven years.

In response to the large number of owners in this situation, the banks generally prefer a form of sale called a short sale. This process alleviates much of the pain for the homeowners and the banks. In a short sale, the banks agree to take a loss on the property and (in most cases) free the homeowner from the remaining debt. The damage to individuals credit is much less, the tax implications are often much better, and sellers may be able to purchase another home again after just two years. But most importantly, a short sale does not incur any out of pocket expenses for the seller. The senior lender will pay for the cost of the sale including commissions, escrow fees, title insurance, and deliquent property taxes! 
The banks win because the cost of going through a foreclosure is very expensive and they do not have to keep a non performing asset on their books for a long time.
Every family situation is unique, but in most cases, I can help. Please feel free to give me a call. We can sit down and chat about the different options available to you. If we do a short sale, I will list your property to sell and the bank will likely agree to accept a sale for less than is owed on the property. If owners do not go down this route, their home will eventually end up as a foreclosure. A short sale is clearly the preferable path to take. Here is a short summary.
 

Foreclosure (Bad)

Short Sale (Much Better)

Damage to Credit (Foreclosure remains a public record and on credit history for 7 years) Cannot purchase a Fannie Mae Backed Loan for at least 5 Years. 

Eligible to buy a new home with Fannie Mae after just 2 years. 

Credit score may be lowered by 200 points or more. (Costs for car loans, cell phones and other items will likely increase)

May only lower score by 50 points.

Difficulty finding another home after going through a foreclosure or an eviction.

You stay in your home until the sale is complete.

Tax implications may be severe.

Current law may offer forgiveness.  Talk to a tax professional.

 
Please feel free to give me a call.  We can sit down and chat about the different options available to you.
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