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Seller's short sale aftermath?

By Michael Kupper

Real Estate Agent with D.R. Horton

March 27, 2008 01:40 AM

I see short sale listings and closings regularly now. Realtor advertisements and the general consensus is that a short sale is better for the seller than foreclosure. This only makes sense if I know what the seller's short sale aftermath is. I have read 2 potential outcomes for the seller.... 1) the bank releases all obligation and credit only suffers form the delinquency prior to the sale ---or--- 2) the bank obtains a judgement for the difference of the mortgage balance and sales price.

Does anyone know what banks are actually doing the sellers of completed short sales??

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Chip Jefferson

Gibbs Realty and Auction Company - Columbia, SC

It is open for negotiating in the short sale with the lender. Cover it with the lender and make the client is aware of the options they present.

Mar 27, 2008 01:49 AM

Debra Kukulski, Broker Associate

RE/MAX Suburban - Cary, IL

SRES;SFR,CDPE;GRI;ABR;e-PRO Realtor, Northern IL

Michael...I think it is so important our sellers facing this situation do consult with and work with an attorney that specializes in foreclosures and short sales.

Mar 27, 2008 01:49 AM

Rob Arnold

Sand Dollar Realty Group, Inc. - Altamonte Springs, FL

Metro Orlando Full Service - Investor Friendly & F

Do what you can to negotiate away the bank's right to obtain a deficiency judgment. That can go a long way to help restore their credit after a short sale.

Mar 27, 2008 02:01 AM

Jeff Davis

Realty Executives Five Lakes - Lapeer, MI

As for what I know about short sales....Pres Bush signed in to law that the owner of a primary residence that has completed (sold) a short sale will not be subjected to the 1099 that counted the difference from owed to sales price. If it was an investment well I think their out of luck. Someone that has received a foreclosure notice from their lender has only a few options...cut and run and have a full foreclosure on their record which hits their credit for about 250-300 points...stay and fight and have someone buy their home and fall under the pre-foreclosure redeemed category which hits their credit at about 125-150 points.

Mar 27, 2008 02:18 AM

Michael Kupper

D.R. Horton - Pflugerville, TX

Jeff Davis, thank you for differentiating the credit "hit" w/ foreclosure vs. pre-foreclosure.

Mar 27, 2008 02:33 AM