A Short Sale is an arrangement between the current owner of a home and the bank/lender that lent them the money to buy their home to accept a sale offer for less than the total amount owed to pay off the home and avoid a foreclosure situation. The result is the sale of a client's home at slightly below market value, allowing the home seller to avoid the negative impact of foreclosure on their lives, the buyer to get a great deal on their new home, and the seller's mortgage holder to avoid the costly and time consuming foreclosure process.
There are many factors that affect a homeowner's ability to qualify for a Short Sale. In most cases, to qualify for a Short Sale a homeowner will have had to have already missed payments, demonstrate a genuine hardship that created the inability to meet mortgage obligations and have little or no equity in their home. A consultation with a member of the Home Sales Remedy team will help to determine how strong of a candidate you are for a Short Sale and whether your needs can be addressed effectively with a traditional sales process.
A Short Sale generally limits credit score impact to score reduction(s) related to the missed mortgage payments. There is no foreclosure and none of the impact associated with a foreclosure. In fact, with diligent care, many Short Sale sellers can qualify to buy a home again in as few as two years.
Yes, it does. There are differences between Short Sales for Conventional, VA and FHA loans. Lender requirements vary from company to company and there are also differences in the procedures/requirements for homes with 1st and 2nd mortgages. In the initial consultation meeting with a member of the Home Sales Remedy team we will discuss the specifics that affect each individual homeowner, helping you to understand the options and best plan to sell your home to avoid foreclosure.
Generally no. For FHA Short Sales there is a seller participation incentive of up to $1,000. For Conventional and VA Short Sales there is not usually any financial compensation for the seller.
Currently, the IRS considers forgiven debt as taxable income and seller in a Short Sale transaction can expect to receive a 1099 form from their lender for the amount of debt forgiven in a Short Sale. For the most current tax implications of a Short Sale and how those implication may affect you, Home Sales Remedy and Dallas City Center recommend that you speak to your CPA, financial advisor or other tax professional.