A short sale is when an owner of home sells the property for less than the amount owed on the mortgage. This has become common practice since the collapse of the real estate market since most houses are significantly over-mortgaged. We understand how scary and upsetting this process can be.
Significant tax liabilities could become an issue for an unwary seller in a short sale. The best protection against such liabilities is information and an experienced negotiator.
Short sales have some significant advantages over foreclosure. In a short sale, especially if there is only one mortgage, the seller can sell the property without the fear of any additional debt or legal proceedings being brought against them. In a foreclosure, the lender has the right to sue the borrower for many different types of damages including but not limited to, any deficiency in the amount owed under the note and mortgage from the actual sale price, collection activities, fees to secure the premises, taxes, insurance, eviction, and legal fees. These additional fees quickly add up to tens of thousands of dollars and are included in the foreclosure judgment giving the lender not only a judicial order to allow the seizure and sale of real property, but also a money judgment for the difference and expenses.
Perhaps the very best advantage of a short sale is that it may not cost the seller anything. Depending on the seller’s financial status, the payoff bank will often cover all fees, including legal fees, open taxes, title expenses, etc.
At The Devery Law Group, P.C., we have years of experience in negotiating short sales for homeowners.