USA – A $500 Trillion Dollar Racketeering Scheme

Should I short sale my home?

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Should list my home for a Short Sell with a Realtor?

www.BetterQuest.com


It depends entirely on your situation. A lot of investors lost their shirts, their pants, and their skivvies these last few years. Some of them were forced into turning their homes over to the banks so that they could reduce their overhead. Most of them simply short sold the home.

 

I honestly believe that if you have exhausted everything in trying to work something out with your lender, and you honestly have no other options, then listing your home with a Realtor for a short sale is better than a Foreclosure for the bank.

 

Professional Short Sale Realtors already know how to work with your bank to list the property. They will give you market research and ideas on what your home is actually worth.

 

Short selling your home is not a decision you should make lightly. It is often a difficult and long process. If you are successful, the difference between what you sell the house for and what you owe on the house is forgiven. You’ll also avoid a foreclosure on your record.

 

KEEP IN MIND, that until the end of 2009 there are laws in effect that will still forgive the difference lost by the bank up to a certain amount. But in 2010 any difference lost by the bank will be considered income to you, and you might have to pay taxes on this difference in the years to come. It adds insult to injury when you sell your home this way. There are a few states that are forgiving the difference, CA is one of them, but not all have jumped onto the forgiveness train, so check with your tax accountant.

 

This is not often told to the person who decides to list their home on a short sale. A good tax attorney will be able to tell you the tax consequences to your decision. Yes you avoid a foreclosure on your credit report, but you also face Uncle Sam’s wrath. They have to make up their losses somehow with all the government aid being tossed out there. Laws are currently in flux so watch for change. It is coming.

 

If you owe less than what you property is actually worth, (a rarity in today’s market) than you can offer up the home in what is known as a Deed in Lieu of Foreclosure without having to list the property at all. The Bank simply takes the property back.

 

If you decide to take this route I cannot emphasize enough.

 

FIND AN EXPERIENCED REAL ESTATE AGENT WHO HAS DONE A SHORT SALE BEFORE. Your real estate agent will be able to deal and negotiate with the mortgage company(ies) on your behalf. An experienced short sale agent will give you a much better chance of successfully short selling your home.

 

Because there is often so many different entities involved in a mortgage (1st mortgage, 2nd mortgage, the investor on the loan, etc) you really don’t want to do this on your own, with no experience. Plus, you’ll never have any out of pocket expenses to pay an agent, as everything is essentially paid by the lender.

 

WARNING! Just because an agent says they specialize in “short sales” does not mean they have actually successfully done one! There are many classes agents attend regarding short sales, but nothing compares to real world experience.

 

Follow Instructions Exactly

 

An experienced short sale agent will tell you what you need to do to get the house ready to sell. Don’t get too hung up about the price. If the agent wants to set a low price on the house, there is a reason behind that.

 

In my own short sale, we priced the house pretty low and got an offer very quickly. You need a buyer that is willing to stick around for a super long closing or changes to the agreement. In my case, it took almost 4 months from when we got the offer to when the closing took place. Don’t get hung up about the price, all you should care about is getting the place sold.

 

Know The Tax Implications

 

Congress recently passed and the president signed a law that likely releases you from any tax implications of a short sale, most state are honoring this.

 

Talk to a qualified tax attorney or CPA about this for your particular situation. Your real estate agent should know about this! A good agent will have a quality referral for you to handle the tax implications of your short sale.

 

 

Prepare to move quickly

Because your closing date may not be set in stone, you need to be prepared to leave your home quickly if needed. You do not want to end up like me and live in your office for 2 months! Trust me, it’s not fun!

 

A minimalist lifestyle is nothing to be ashamed of; in fact it should be venerated. Your possessions are just inanimate things; it’s the relationships in your life that really matter. OK, enough life advice! Sell anything you don’t need or haven’t used in the last 6 months on craigslist! The less you have to deal with on moving day the better.

 

Prepare yourself emotionally

 

If you are already in default, or have a foreclosure pending, this whole scenario and process of trying to short sell your home can be very emotionally draining.

 

You will receive solicitations from everyone and their mother. You may have people stop by your home while you are still there. It can be a very difficult process.

 

Make sure you have people in your life to talk to about your situation. You will need a support network to help through this time in your life. It will pass. And you are being proactive in seeking a short sale of your home. You are taking the right steps, and in time, everything will work out. I can’t promise it will be easy, but you will make it!

 

When it comes right down to it you have to ask the question. If walking away is the only answer left in your mind, then it is time to call a Realtor to help you through the process one who uses an attorney based agency like McFerran, Burns & Stovall who charge a minimum consulting fee to the seller of $150 and negotiates their fee trough the bank. They are a good source of affordable legal advice and they can work throughout the states in some cases. Find the ones in your area by contact a local agent who specializes in short sales. The good ones know where to go.

 

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