Here are some helpful tips to making a Short Sale transaction a successful one.
Whether you're SELLING a home through a Short Sale or BUYING one, be prepared for what's ahead. Each lender is unique and will most likely have different systems in place to handle each type of transaction. For example, they could have a Short Sale Dept., a Loan Modification Dept., a Home Retention Dept. ect.
Some times Short Sale transactions can be long and frustrating. Sometimes you may wait months only to find out the sale was not approved. This is happening more now that lenders are doing more loan modifications connected with the Making Home Affordable plan.
A Short Sale means the lender that hold the note on the property agrees to accept a home's current sale's price and considers the full amount paid in full. If the lender still demands the seller (homeowner) to pay the remainder of the balance, that would not be considered a Short Sale, at least not one a seller would want.
Normally if the lender "forgives" part of the loan, the homeowner would not be responsible for paying taxes on the "forgiven" portion, but the lender will still report the loss to the IRS, so be sure to check with your tax attorney or tax preparer to find out if you would be liable for paying taxes on that amount. On a recent Short Sale I was doing, a lender approved the Short Sale but stated that upon closing, their recovery dept would try to collect the balance not covered by the sale. So, sellers MUST be sure to read your Short Sale approvals very carefully to make sure the Short Sale will cancel all debt secured by your home.
If you are involved on the purchase or sale of a home that falls in the Short Sale category, the buyer and seller are the ones that enter into a contract to sell/buy the home, CONTINGENT upon the lender's approval of the price. Once the lender approves the price/offer, escrow may be opened for the winning offer.
Feel free to contact me with ANY questions you may have on any of your Real Estate needs. I always make time to talk to you.