Short Sale Q & A - What are the Pros and Cons of Short Sales
Q - What are the pros and cons of a short sale ?
A - A short sale occurs when your lender agrees to accept less than the balance remaining on your home. It is a way for you, as a seller, to avoid foreclosure and sell your home.
For those who owe more on their home than it’s worth, it sounds like a great way to avoid foreclosure but, that doesn’t mean it is right for everyone. Should you consider a short sale on your home? My first advice is to consult either a tax attorney or your CPA as well as a real estate attorney who specializes in handling distressed properties. There are pros and cons to doing a short sale; with regards to your options, consult a real estate agent who specializes in short sales.
Pros to doing a short sale:
• You will be able to sell your property, get out from under a mortgage you cannot afford and lower your debt.
• You are still able to sell your property in a declining real estate market, even if you owe more than your home is worth.
• Buyers who couldn’t previously afford a home in a popular market area, may now be able to buy a home at market value in that area.
• While a short sale isn't always an ideal situation, it is typically better than a foreclosure, which stays on your credit report for 7 - 10 years.
• If your home does into foreclosure and is sold at auction for less than the mortgage, you can still be held responsible for making up the difference.
Cons to doing a short sale:
• Your lender may refuse to do the short sale, or they may still hold you responsible for the remaining debt.
• The bank’s loss is considered taxable income for you, and you may have to pay taxes on that amount.
• Short sales do stay on your credit report for approximately two years and may make it difficult for you to a get loan in the near future.
• You may have to find a real estate agent willing to work with short sales.
• Short sales take longer to close than traditional home sales.
Our short sale team can review your options with you in order to help you decide if a short sale on your Charlotte NC home is right for you. Call today - (704)491-3310 or email Debe@DebeMaxwell.com to discuss your options.