Avoiding Foreclosures in Spring Hill by Selling Your Home For Less Than You Owe - The Short Sale.
JAZ Zydenbos, REALTOR® - NOTARY
Tropic Shores Realty
3441 Deltona Boulevard
Spring Hill Florida 34606
Okay, you've taken out a large mortgage on your home in the years of 2003 through 2007 in the Spring Hill area of Florida. Maybe you have refinanced to cover remodeling or other expenses. And now you find yourself not keeping up with your mortgage payment because a layoff, reduction in pay, divorce or illness. More and more homeowners are finding they need to sell homes for a price far below than they owe on their present mortgages, commonly known most recently as a short sale.
Selling short of what you owe is definitely better than a foreclosure, which stays on your credit record for a minimum of ten years. Preserving your credit rating is important in our society. A poor credit rating makes it nearly impossible to purchase anything on credit and your auto insurance can virtually double. Also applying for a job can be tough if your credit score. These are all considerations in avoiding foreclosure. So it's best to try to short sale your home before going through the embarrassing and laborious process of being foreclosed upon and being chased by the bank for a deficiency judgment and other IRS considerations.
Before you put your home up on the multiple listing service for a short sale, talk with a tax advisor or attorney about possible tax repercussions. The IRS looks at the balance between the value at which you sell your home and the mortgage owed as "income" on which you will pay taxes and the IRS is becoming very vigorous in their collection efforts. I have a number of attorneys with whom I work with on a daily basis to ensure that homeowners selling short know exactly where they stand in the process and also to help the homeowner avoid foreclosure.
An exception to this rule of the IRS is if you can prove that you were "insolvent" - that your debts were bigger than your assets- before your mortgage lender agreed to a short sale of your property. A tax advisor or a good real estate attorney will be able to determine whether you're insolvent by IRS standards. All short sales that I perform as a REALTOR® are with the aid of a competent real estate attorney. I recommend Andy Lyons, Brian Lit and Doris Rodriquez as my standby attorneys. Each has their own specialty with the short sale process and foreclosure avoidance. Please tell them that JAZ Zydenbos told you to call for more immediate assistance.
I Will Help You Short Sale and Help You Avoid Foreclosure
If you find selling you house for less than you owe on the mortgage is an option short of foreclosure or bankruptcy, I understand your situation rather well. I typically take a much lower commission on short sales of which your lender pays, and it often takes much longer to actually close the sale once the seller accepts an offer.
That's because the closing happens only when the mortgage servicer and mortgage investor agree to the terms of the sale and the all important net proceeds to the mortgage investor of which it is generally 88% of fair market value. That's not the sales price, but the net proceeds. Regarding pricing your home, it should be priced in our falling market for what it would be worth three months from now. Currently the Tampa Bay market and Spring Hill Florida values are slipping downward at about 1% per month.
Convincing Your Mortgage Lender
The buyer will need your help, my marketing ability and that of your attorney in negotiating a short sale approval with your mortgage lender.
Together we'll need to convince your bank that you deserve approval for a short sale. A good attorney and staff will tell your mortgage lender about your financial hardships, including layoffs, divorce or medical issues. It's also good to know that a sharp attorney and competent real estate agent such as myself will make your best case by looking strongly at your neighborhood for sinkholes, foreclosures, crime and even sexual predators in the area to frame your best hardship case for a short sale.
While this may seem obvious, now is not the time to go shopping by giving up paying your mortgage, taxes and insurance and home owner association fees. Your mortgage holder will see these debts on your credit report and think you're a careless spender who doesn't deserve the time of day much less debt forgiveness. In my realm of experience, I have not seen any breaks being given out by lenders to home owners desiring a reduction in principal amounts or mortgage rates without the assist of an attorney.
Beware of a bank or anyone who tells you that the bank won't even begin to speak with you about a short sale or a loan modification unless you are several months late in paying. You are setting yourself up for foreclosure proceedings and getting your home on the short sale track becomes much more difficult. Call me for some quick advice and then consult an attorney to become your legal representative.
It will be necessary to provide the lender through your attorney documentation of your financial hardship, such as pay stubs, bank statements and so forth. I know, this seems like an invasion of your privacy, try to think of it as the fastest way out of an otherwise overwhelming debt and further credit issues and foreclosure avoidance.
It's true, short sales take much longer to close than more conventional sales, so plan accordingly once your attorney and I go to work for you. You'll avoid bankruptcy and a huge drop in credit scores and remarks on your credit report. If a short sale doesn't work for you, you'll know that you've done everything possible you could to avoid foreclosure and perhaps bankruptcy.
Questions for Your Attorney
- Would a short sale be better than a foreclosure in my situation?
- Is bankruptcy a better option than a short sale for me?
- What does a buyer need to know about purchasing a short sell property?
- When is the attorney fee collected? Upfront or upon closing? Is there a retainer and how much?
Where do I Move To?
There are plenty of opportunities to rent, lease, lease option with a future purchase or seller financing available. Just call me anytime and I can find you a nice affordable home within a day or so. Just call me at (800) 819-4793, anytime. If you would like a list of owner financed homes or recently foreclosed homes to purchase, just please click here and I will send you a customized list within a few hours.
I hope this short sale information has been helpful. Whatever you do, don't put it off any longer. The problem only gets worse, the longer you wait.
Most sincerely yours.
Tropic Shores Realty
Spring Hill, Florida