What is a Short Sale?
Short Sales occur when homeowners sell their property for a sales price less than the amount owed to their lender(s) after all sales expenses, including brokerage fees, are taken into account. In order for this to take place the lender(s) must accept a discounted payoff; meaning the bank(s) get paid less than the full loan amount owed. In a short sale, the homeowners get complete relief from all of their mortgage debt.
Why would the bank accept less than what is owed?
A Short Sale is a win-win solution for the homeowner and the lender. The lender gets the highest price for a quick sale at a market price. The borrowers get their credit restored and generally get relief from possible future legal actions and deficiency judgments
How will a Short Sale affect my credit?
The end result is your home is sold, the mortgage is satisfied (paid off) and you avoid a foreclosure or a bankruptcy in the event of hardship. Perhaps even better, your credit rating will almost immediately improve because your credit report shows that your mortgage was paid in full or debt settled.
Are there any tax consequences?Please check with you tax preparer for YOUR tax questions concerning SHORT SALES.