Today's market seems to be full of short sales!  For those of you who haven't run into this yet - brace yourself ... you will.  Some people look at this as a bad thing - but in all honesty, it's not.  So how do you handle a short sale??  Here's some basics for you...

A Short Sale is when a home is sold for less than what they owe ... and usually under market.  The lender is accepting less than the total amount due as payoff for the loan.  Not all lenders will do this - especially if it makes more financial sense for them to foreclose.  BUT ... a big but there - lenders DO NOT want to own your home.  It's more costly for them (usually) to foreclose on a property and then sell it either at auction or with an agent.  If you're the one selling the home, a Short Sale can prevent you from possible foreclosure - which is fabulous.  But understand that there are certain precautions you want to make as a seller in a Short Sale transaction.  1) Be sure the Realtor you are using is familiar with how the Short Sale process works. 2) Understand that the IRS may look at the difference from what you paid to what you owe as income (1099 time) - there is a document you can obtain from Title to potentially eliminate that problem ... but be sure and talk to your tax advisor. 3) There are some banks (whose names I won't mention) that try to have you accept the difference as a personal lien.  This can be worked around - so again - be sure to work with someone who has done this before.

For a buyer, a short sale can be a great purchase ... especially when it's priced under market (as it should be) to assist the seller in selling the home quickly.  Just keep in mind that buying a home through Short Sale can be a long process.  Sometimes the bank will respond quickly and other times it can be months.  So if you're an investor - this is a good place to look. 

Personally I've dealt with and am currently dealing with short sales.  With the Adjustable Rate Mortgages (ARMs) that people got into a few years ago - there are many people out there who can no longer afford their mortgage payments.  The number of foreclosures in Las Vegas has grown - and a Short Sale is a great way to avoid that.

If you have any questions about Short Sales or if it's the right decision for you and your home - give me a call or send me an email.  I'd be happy to talk to you about it.

http://www.aubryeharris.com/

Cell: (702) 375-7443

aubrye.harris@coldwellbanker.com