Sometimes the owner of a property is no longer able to pay the mortgage or deed of trust. When this happens, foreclosure often follows -or worse: bankruptcy. But there is an alternative, the short sale.
Short sale is usually the last step taken by the bank to recover losses from a defaulted mortgagor. When lenders agree to a short sale, it means the lender agrees to accept less than the total amount due. They are willing to forgive a certain amount of debt or deficiency. However, not all lenders will accept a short sale or discounted payoffs, especially if it would make more financial sense to foreclose.
State laws vary, so consult your real estate lawyer to determine if your loan and case qualifies for a deficiency judgment or claim for a short sale.
To pursue a short sale, consult your real estate attorney if your case is eligible -certain state laws only allow specific values for a loan to qualify for a deficiency judgment in a short sale. Also, consult an accountant, the IRS may consider the unpaid debts as income, affecting your tax records. Also, the borrower is not guaranteed that the lender will not pursue them for the remaining debts beyond the debt already forgiven -an especially good reason to consult your attorney.
Short sales are not just meant for the nonpayer's but those who have never made a single installment can make a short sale, due to the negative equity that they have for the present. It becomes easy for an individual to short sell the house and get out of the rough financial situation.
Due to negative equity secured, even those who've never made a single payment or installment can avail of a short sale. A short sale is the eject button of a financial situation that's headed straight down to bankruptcy, take it when you can, while you can.
The process: The contract, authorization to release, and the addendum -these are the key parts of the whole short sale process, topped off with the warranty deed. Here we'll take a closer look at the contract and the addendum:
The Contract: This can be laid out in a single page, or even 20 pages -any type of generic sales or purchase contract. Should the price be mentioned, it should be followed by the phrase "see addendum".
Contract: This can look like anything and can span from just a page to an entire mini book -it all depends on what it contains and how it's laid out. Just think of a generic contract, it can be really simple or really sophisticated. The addendum should be referred to, at any time the price is mentioned in the contract.
This is the most important piece of paper in your entire manual! Let's review the Addendum in detail. The first section on the top is just generic information pertinent to the specific property:
Info on the origin of the contract for short sale
Date
Names of the parties involved
Address
Tip: It's advised to list both the legal address and the simple address in the addendum -for the purposes of clarity and transparency.
Any investor, who wants to make money in the foreclosure market, should always consider that a short sale could still bring him a bargain property.
Short sale is usually the last step taken by the bank to recover losses from a defaulted mortgagor. When lenders agree to a short sale, it means the lender agrees to accept less than the total amount due. They are willing to forgive a certain amount of debt or deficiency. However, not all lenders will accept a short sale or discounted payoffs, especially if it would make more financial sense to foreclose.
State laws vary, so consult your real estate lawyer to determine if your loan and case qualifies for a deficiency judgment or claim for a short sale.
To pursue a short sale, consult your real estate attorney if your case is eligible -certain state laws only allow specific values for a loan to qualify for a deficiency judgment in a short sale. Also, consult an accountant, the IRS may consider the unpaid debts as income, affecting your tax records. Also, the borrower is not guaranteed that the lender will not pursue them for the remaining debts beyond the debt already forgiven -an especially good reason to consult your attorney.
Short sales are not just meant for the nonpayer's but those who have never made a single installment can make a short sale, due to the negative equity that they have for the present. It becomes easy for an individual to short sell the house and get out of the rough financial situation.
Due to negative equity secured, even those who've never made a single payment or installment can avail of a short sale. A short sale is the eject button of a financial situation that's headed straight down to bankruptcy, take it when you can, while you can.
The process: The contract, authorization to release, and the addendum -these are the key parts of the whole short sale process, topped off with the warranty deed. Here we'll take a closer look at the contract and the addendum:
The Contract: This can be laid out in a single page, or even 20 pages -any type of generic sales or purchase contract. Should the price be mentioned, it should be followed by the phrase "see addendum".
Contract: This can look like anything and can span from just a page to an entire mini book -it all depends on what it contains and how it's laid out. Just think of a generic contract, it can be really simple or really sophisticated. The addendum should be referred to, at any time the price is mentioned in the contract.
This is the most important piece of paper in your entire manual! Let's review the Addendum in detail. The first section on the top is just generic information pertinent to the specific property:
Info on the origin of the contract for short sale
Date
Names of the parties involved
Address
Tip: It's advised to list both the legal address and the simple address in the addendum -for the purposes of clarity and transparency.
Any investor, who wants to make money in the foreclosure market, should always consider that a short sale could still bring him a bargain property.
About the Author:
Know about short sale an alternatives to bankruptcy or foreclosure only at Don Burnham's website http://www.weknowthewayback.com. Visit today to know all about short sale!
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