Short Sale or Deed of Lieu Foreclosure is the question. Seems many homeowners who are upside down and want to get out without foreclosing are asking themselves this question. Short Sales which are extremely popular and in many cases time consuming due to the 3rd party (the homeowners lender). These days the process is much quicker and not as bad as they were a few years ago. Deed of Lieu Foreclosure has been thrown into the picture mainly an option given to homeowners by their lender. Now it has many homeowners contemplating on which would be best for them.
Short Sales as previously explained is when the property is being sold for less than what is than owed on the property and the lender has to approve the final sale. With the final approval letter the terms are usually written in there. At one point the lenders were trying to get the sellers to sign a promissory note or bring cash to the table, that has changed over the years. In many cases the difference from the short sale is now being considered satisfied or paid as agreed. This will still have an impact on credit. The 1st year afterward homeowners do have to pay taxes on the difference. So keep the copy of the Hud-1 from the sell of the house.
Deed of Lieu Foreclosure is when the homeowner hands the deed to the lender voluntary, the lender cancels foreclosure proceedings already underway and does not proceed with foreclosure. The lender may or may not come after the seller for the difference once the property is eventually sold. In many cases they do.
Seeking the advise of a Real Estate attorney will be the best advise, if that’s not an option always get everything in writing from the lender whatever their final decision is. For example with short sales the banks always send the final approval letter with the terms written out and sellers have the write to not go through with the short sale if they don’t agree to any of the terms and the same with Deed in Lieu Foreclosure. But in many cases what options do you have but to try to negotiate whatever terms that are not agreeable.
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Damon J. Brockenberry (Damon The Agent)
Your Washington DC Area Realtor
Servicing Washington, DC, Maryland, & Virginia
cell: 240-694-6460 e-mail: sold@damontheagent.com
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