Selling Your Home in Frankfort
Here are a Few Things to Consider
Though the economic recession hit us hard over the past few years, the numbers of foreclosures are down by 32% as compared to it's peak in December 2010. There are certain cities that's been been flooded by foreclosures and short sales, and for some towns, this fact is not surprising. However, if you're a homeowner in Frankfort looking to sell your home, you may want to consult a real estate professional, prior to listing your property, to get a clear understanding of your local market.
Should I Sell My Home as a General Sale?
The Chart below shows the median listing prices in the area, as well as the percentage of short sales and foreclosures.
Click the Image to Enlarge
As you can see, the number of regular sales outweighs those that are being sold as a Short Sale or those in Foreclosure. The best way to determine if you should sell your home as a regular sell is to consult with a real estate expert.
Should I Sell My Home as a Short Sale
A Few things to Consider if You sell your home "Short".
What is a Short Sale?
A short sale is fairly straightforward. It takes place when the lender allows you to sell your home for less than you owe on your mortgage. In many cases, the lender absorbs the loss, forgiving you of the remaining debt. Short sales have been increasingly popular since they usually cost the lender less than a foreclosure, and the lender can often sell a short sale property for more than a foreclosure property. It’s an arrangement where both parties can limit some of the unpleasant effects associated with not being able to sell a home for the mortgage balance.
How Can You Get a Short Sale?
Lenders have to decide whether or not to sign on to a short sale. Usually, you are required to demonstrate financial hardship before you can receive approval for a short sale. On top of that, some lenders like to see that you have tried to sell the home for a higher price first. Often, you won’t be approved for a short sale unless your home is on the market for at least 90 days. Realize, too, that having a second mortgage can complicate matters – especially if that second mortgage is from a different lender.
Consequences of a Short Sale
Because a short sale is seen as a form of debt forgiveness, there are consequences to taking this action. Your credit score is going to take a hit as a result of your short sale. In some cases, depending on how the lender reports the short sale, your credit score can be impacted almost as much as if you had gone through foreclosure. Be prepared for a lower credit score, which could result in a higher interest rate on your next loan. A lower credit score might also cause other problems. And, while you can still get another mortgage after a short sale, you might have some difficulty finding a lender to agree. Another consequence might have to do with taxes. Right now, the Mortgage Forgiveness Debt Relief Act of 2007 is still in effect. It was going to expire at the end of 2012, but it has been extended to the end of 2013. Normally, a short sale results in the amount forgiven being taxed as income by the IRS. However, with the extension of the Mortgage Forgiveness law in place, you avoid taxes on the forgiven debt. Realize that the Act might not be extended another year, so it might make sense, if you are going to attempt a short sale, to take care of it this year.
For More information about Short Sales, click Here
As you can see, there is a lot to consider when selling your home as a short sale. To get more information on what you should do with your home, call Maikol at Real People Realty, of Frankfort, IL. I am a broker, and am very knowledgeable about the local Frankfort Market. I can be reached at 708.218.3612. Or click here to get current Market Data on Frankfort, IL.