I have been getting a lot of inquiries about short sales and questions as to what they are exactly. The basic jist of a short sale is this, the sellers loan or loans total more than what the home would sell for in the current market. There are a number of reasons for this type of situation, perhaps the home owner took out a line of credit to pay off credit cards or cars or just do some home improvements. Or maybe they bought the home when the market was booming and due to recent price declines the value has gone down in thier neighborhood. Regardless of the reason, they owe more than the home is worth at this time.
So What do you do? The only thing to do is call the mortgage lender and ask if they will work with you on a short sale, request a short sale package and list your home with a qualitied Realtor that will assist you in marketing the home and negotiating your short sale on your behalf. My team and I are experienced in negotiating short sales and would be happy to meet with you to discuss your options. Call Kent today for more information 602-980-5368.
It is important to note that many banks and lending institutions will not do anything to help a homeowner in this type of scenario until they are 90 days past due on payments. The only way to find out is call them and ask.
Other questions that typically come up about short sales. Am I liable for the differenece between what I sell the house for? Again this is many times dependent on the lending institution. Some will write off the difference as a total loss and there is no liability to you as the seller, some will not and will require that you sign a promissory note for the difference. Some will give you the option. It is important to get any agreements with the bank in writing either way. We advice all our clients to get professional legal advice from a qualified attorney regarding this.
Another question that is commonly asked is Will I owe taxes on the difference? Again we suggest and advise all our clients to speek with a certified accountant regarding tax questions. However on December 20, 2007 Congress and the white house signed a bill that will allow owner occupied sellers (not investors) to short sale thier home and have no taxable consequences for any short sale that is completed by December 31, 2009.
An important note to make to home buyers that want to include short sales in thier search for homes. The final acceptance of a purchase contract and the purchase price is subject to the lending institutions approval. This can take weeks to obtain. Be prepared to wait patiently for this approval. Once the approval is obtained you will typically have 30 days to complete your inspections, appraisal and close escrow. You can get a great deal when buying a short sale home, just don't be in a hurry to close.
If you have any other questions about short sales please feel free to call me anytime. Kent at 602-980-5368 with West USA Realty in Phoenix, Tempe, Chandler, Gilbert, Mesa, Scottsdale, Ahwatukee, and other cities throughout Arizona.
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