When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; moreover, not all sellers nor all properties qualify for short sales.
Below is what you can expect when pursuing a short sale with the bank:
* Waiting for the bank to respond to an offer is frustrating.
* The bank will want to examine personal records such as tax returns, bank accounts, assets and liabilities, in addition to asking for a hardship letter from you.
* Accommodating buyers will mean keeping your home in spotless condition for weeks or months until an offer is received and putting up with traffic through your home.
* There is no assurance the bank will accept a short sale offer.
* The derogatory reference will remain on your credit report for 7 years.
It is strongly recommended that you obtain legal advice from a competent real estate lawyer and call an accountant to discuss short sale tax ramifications. K&M LAW can determine whether your loan subjects you to a deficiency judgment. K&M Law can also review your case to determine if a loan modification may be an option, see case results here. An accountant can help you avoid paying additional taxes for doing the short sale.
Even with a short sale, you may still be eligible, under Fannie Mae guidelines, to qualify for another home loan in 2 years instead of 5 to 7 years.
Contact K&M Law and consult with a representative to discuss short sales.