Why A Short Sale?

With distressed properties, distressed homeowners, and foreclosures threatening families who owe more than their home is worth everywhere across the country from Yonkers to Yerington, there has never been a greater need for quality information. What options available to families facing foreclosure? Is losing your house an eventuality, or can the proper Realtor help navigate the tough terrain of a confusing housing crisis?

I’m a long time realtor from Westchester County, NY and I’ve been watching the trends for a long while. It’s my job to help families find alternatives to foreclosure. Today I’d like to talk about short sales, an excellent option for those who have found themselves upside down, owing more than their homes are worth.

First off, don’t just walk away from your mortgage and leave your home to foreclosure. This is a big mistake that many people make. Yet it is entirely unnecessary, as losing a distressed property to foreclosure is far from inevitable. The consequences of walking away from a mortgage go far beyond simply losing your house. At the very least, a short sale will reduce your losses when it comes to credit and tax.

A short sale, simply stated, is when your lender forgives the difference between the remaining balance on your loan and what another buyer is willing to pay for the property. In a best case scenario, the lender will accept a short sale offer and then write off the deficiency as a cancelled debt. A good realtor can help make this happen.

A short sell is a far better option for both the lender and you. The credit implications are significantly less for a short sale than they are for a foreclosure. For example, a short sale will put a ding on your credit for one to three years (less if you use a high quality credit repair company), but a foreclosure can follow you around for almost a decade.

If you are still living in the house, then the Mortgage Debt Forgiveness Act will excuse you from having to pay taxes on up to two million dollars in debt that your lender is willing to cancel in a short sale or foreclosure. However, this act will not apply if you are not living inside the house, so it is not a viable option for investors. The only way for investors to avoid paying taxes on cancelled debt is if they are able to prove insolvency.

Short sales are an excellent choice, but there are other options available such as loan modification. Get in touch with me today. I would love to be your solution.

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