The other day I was reading an article and it said that 2015 was going to be the comeback of the short sale. In my practice, I never really saw it go away. Short sales are as popular today to strategically exit a property that is underwater, as it was when it started in 2009. Short sales, while not too complicated, do take some skills and know how, and that is where we come in. With tax implications and a lender incentive of $10,000.00 to the borrower, it is best to contact an attorney to get the “short sale” done right the first time.
In a short sale, the mortgage lender takes less than the mortgage balance as a payoff of the mortgage debt, and forgives the difference. The Mortgage Debt Relief Act, if extended, will also protect sellers from any 1099-C penalties and the greatest thing is that the borrowers gets to live on the property until the date of the sale. Even greater is that the mortgage balance is written off and the seller can walk away with $10,000.00 in their pocket as relocation assistance.
How does a short sale work:
- First you must list the property with a realtor.
- Second you must find a buyer for the property.
- Simultaneously while having the property listed, you must apply for HAFA and start the short sale. HAFA guidelines are strict and therefore it is best to let an attorney handle it.
- Borrower financials are submitted and a short sale application is started.
- Once an offer comes in, the offer is submitted to the short sale lender for approval
- The lender will order a BPO or appraisal to confirm price.
- The lender will accept the short sale offer and advise of the deadline to close.
- The Buyer then goes to his or her lender for financing or if cash, the closing can take place within days.
Obviously, the above is a quick guide but honestly, there are so many nuances and intricate details of the short sale, that it is best to have an attorney handle it.
At the Law Offices of Jacqueline Salcines, PA, we have an entire short sale department. A team of knowledgeable managers and attorney to process the short sale, confront the lender on any escalation issues, and confirm price when the lender counters at a higher unreasonable price.
Plus, attorney Jacqueline Salcines is also an accountant and able to provide advice both on the legal and tax consequences of the short sale. We go to bat for you so that your short sale can be a success.
Contact us today. The first consultation is always free. Let us do the work.
TRUST | COMMITMENT | RESULTS
Jacqueline A. Salcines