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Is a short sale the best option for a seller in distress?

By
Real Estate Agent with BHHS|Drysdale Properties CalBRE #01255032

Actually , NO it may not be....

This is where we are going to see a lot of backlash within the next few months when the sh-t hits the fan.

There are mitigating circumstances to each particular situation. What may be right and work for one may not work for the other.

There may be penalties involved in a successful short sale that may find a foreclosure to give the best option in reducing a clients liabilityand /or a short sale may indeed be the better choice. This is why it is imperative that a seller check with a real estate attorney before making a decision to proceed either with a short sale and/or foreclosure. At the very least speak to a CPA who is knowledgeable of the short sale and foreclosure process and the penalities involved etc.

There are sellers who think because they allowed their home to go into foreclosure that was it , all done, nothing to worry about. Hmmmm, the foreclosure is usually on one loan. That leaves the other loan out there open and anxious to get their money back....

Each state has their own pecularities. California is non recourse state.

Then we have those who had a successful short sale who may be hit with judgment from the 2nd lender.

Remember, a HELOC loan had to be used entirely for capital improvement of the home.

I think there will be a lot of surprised and very distraught individuals within the next few months. Many will be forced into bankruptcy.

This is a mess that will have several ramifications and fallouts before some semblance of order has been met.

However this too shall pass. Our job is to give as much support as we can to our clients thru these hard times and to continue ourselves to educate and learn as much as we can to pass on knowledge even though the stakes and rules keep changing every day.

Even though the loan modification is only helping a few , Sellers, PLEASE speak to your lender first and see if  a loan modification is at all possible. Yes, I know they have those on the phone systems who are not very knowledgeable or care but if you are persistent and keep calling back you will eventually find someone who actually knows what is going on and might be able to assist you.

Document every time you have called and get the name of the individual you spoke with.

Now I will tell all of those in trouble with their mortgages, there is LIFE after a short sale and/or foreclosure. Remember this.

You may have to reorganize a bit, change spending habits but there is life.

If a short sale is found to be your best option and you need help listing and procuring a buyer for a short sale please contact me. Catherine Myers and I have performed several successful short sales this past year.

Posted by

Terry L. Osburn, Broker Associate

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925 381 9944

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