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Subject: What is a Short Sale?
Introduction:
Trying to sell a house that is worth less than the amount left on your mortgage? If
so, it may be time to consider a short sale. But what is a short sale, how do they work,
and what are the pros and cons? Join me today as I give you an overview of the short sale
process and help you decide if it's right for you.
Hi, I'm Jim Keaveney of the Keaveney Legal Group. We are a New Jersey and Pennsylvania
based law firm that focuses on helping clients fight foreclosure. We routinely hear from
clients that they would like to leave a property that is "upside down" (or worth less than
the remaining balance on the mortgage). One way to do that is through the short sale process.
Topic:
A short sale is selling a home for less than the amount owed on the mortgage. In other
words, the amount received from the sale is "short" of the amount still owed. For a short
sale to work, the bank must sign off on the deal, agreeing to take less than they are
owed. Banks often prefer short sales over foreclosures because they mean avoiding the
time and expense of going through a foreclosure. Remember, if a bank forecloses, it may take
title to a property, but it still has to wait to sell that property at auction. That would
require the bank to spend even more time to maintain the property. At least in a short
sale the bank gets a portion of its money back, avoiding a total loss.
Of course, short sales used to be harder to work out with banks that did not want to lose
any of their investment. But, recent changes to federal law have created incentives for
banks to work with borrowers in making these transactions easier. The process still requires
bank approval, and not every short sale will be approved, but the federal law makes it
easier to determine an appropriate sale price that will cause a bank to accept the deal.
Now, there is a downside to a short sale. You will usually have to be in default before
a bank will agree to consider a short sale. That will have a negative impact on your credit
and put you at risk of a foreclosure. Also, once the bank accepts the deal and the house
sells, the difference between the amount owed and the sale price of the home may be taxed
as income to you. As a result, you should consult with an attorney before you attempt
to negotiate a short sale agreement with your lender. You can try to do a short sale even
if you are already in litigation, or before litigation starts.
Closing:
If you want to sell your house but can't because of the drop in home prices, a short sale may
be a viable option for you to consider. At the Keaveney Legal Group, we have helped scores
of clients find options to either avoid foreclosure altogether or to sell a property they no longer
wanted. We would be happy to discuss the circumstances of your situation with you and help you determine
the appropriate course of action to suit your needs. For a free, no obligation consultation,
give us a call at 1-800-219-0939 or email me at Jim@KeaveneyLegalGroup.com. I'm Jim
Keaveney; have a wonderful day!