Short Sales
The term Short Sale came from the fact that the Lender’s payoff is coming up “short”. It occurs when a Lender agrees to the sale of a property for less than the amount owed on a mortgage. A short sale package includes: Purchase and Sale Agreement (from Realtor), Addendum to Purchase (from Realtor), Authorization to Release Information, Two Years FULL Tax Returns , Two Months Bank Statements (Most recent), Last Two Pay Stubs, Fill Out Financial Worksheet, A Handwritten Hardship Letter, If FHA, Form 90036 and Homeownership Counselling Certificate.
The rest of the seller’s debt is forgiven with short sale. Rather than suffer the lengthy and expensive foreclosure process, a homeowner agrees to a short sale though the sale of your Mckinney TX Home, for instance is less than the owner owes on the mortgage.
Foreclosure is definitely not the only option. A Short sale is a good alternative. One plus point is that the home buyer will get the home at a reduced price. The Seller will get out of the mortgage liability and will definitely not face bankruptcy. The lender on the other hand though agreed to a loss from accepting fewer benefits will not be facing the protracted process of foreclosure.
Short sale is a better option to foreclosure, however, waiting for the lender to agree on it can be a lengthy process. But if you’re on the way to short sale your Mckinney TX Home, Realtors advise that you seek help from a real estate agent short sale expert. Here’s what they say:
1. Make sure that your Lender agrees in writing to forgive all debts with the short sale.
2. Make things clear with the Lender how the short sale will be reported on your credit report. Take note that even if the short sale is marked as ‘settled for less than the full balance,’ this could still show a negative mark on your credit report.
3. Ensure that you ask your agent about the tax repercussions of short sales. So, if your Mckinney TX home was agreed to a short sale for $30,000 less, then a 1099 for $30,000 will be issued by your lender and you would have to pay taxes on.
Short sale is a win-win situation according to Real Estate agents. If you ever decide to buy another home, short sale has an advantage over foreclosure.