7 Things Your Agent Should NOT Be Telling You About a Short Sale

7 Things Your Agent Should NOT Be Telling You About a Short Sale!  In a short sale, a real estate agent is not permitted to give legal or tax advice.  But in a short sale presentation to a potential client, it is often done.  Here are 7 things your agent should not be telling youabout a short sale:

1. They shouldn't tell you that lenders aren't pursuing borrowers for deficiency judgements.  Maybe to their knowledge they have not heard of it happening, but there is no guarantee that lenders won't pursue borrowers in the future.
2. They shouldn't tell you that a short sale doesn't hurt your credit like a foreclosure does.  There is no way they can tell you how your personal credit will be affected.  We do know that currently Fannie Mae guidelines after the short sale completion date, in two years any loan you qualify for, you can get, whereas a foreclosure it's 5 years and when purchasing a principle residence with a minimum of 10% down and a 680 FICO score.
3. They shouldn't tell you that you need to miss monthly payments before you can start a short sale process.  It may be true, but it may also not be true, and the ramifications of missing payments on your credit score is significant.
4. They should not tell you it is better for you to do a short sale than let your home go into foreclosure.  There are situations where a short sale may not be the best option.  Tax and legal advice is needed.
5. They shouldn't be telling you that H.R. 3548 will protect you against paying taxes on a deficiency in a short sale.  There are guidelines that need to be met in order to qualify to use this provision.
6. They shouldn't tell you that taking a promissory note on a second is the best option for you.
7. They shouldn't be telling you that you don't need to worry about a deficiency balance on your home line of credit because you can just file for bankruptcy and dismiss it afterward. 

All of these statements constitute legal advice and should not be provided to you by your agent.  In these situations, seek legal and tax advice! 

Remember the 7 things your agent should not be telling you about a short sale!