So you have to sell your home, but you owe more than it is worth. Here are your options if you have to sell.
IF you would rather stay in your home, but are having trouble afford the payments a loan modification should be your first step.
But if you already,
- Tried to modify and the payments are still to high. ( I can help with this too.)
- Need to relocate for work or change in family reasons.
- Can’t afford to stay in a home that has too high of a mortgage payment.
- Your property is “UNDERWATER”, and you are prepared to walk away from a home that has no prospects of increasing in value in the near future. This would be considered a “strategic default”.
Short sale or Foreclosure
Short sales can be tedious, exhausting and an inconvenience for a home seller. Is it worth it???? YES!!
Some things are worth the effort. A short sale vs a foreclosure is well worth the effort.
Here are the Pros and Cons to maybe help you make up your mind which way to go
“Cons”
- Having to accommodate buyers seeing your home. Showings can be a hassle with pets and kids
- Organizing and submitting paperwork to the lender. The lenders request for paperwork, bank statements, tax returns, profit and loss statements, budget worksheets etc can be a hassle, and sometime a challenge for even an organized person.
- There is a potential for tax consequences from written off debts from the lender. An important consideration for investment properties.
- There is no guarantee that a buyer will buy, or your lender will agree to take the sale. My success rate for closed short sales here in Manatee County is 94% I have had only three short sales NOT go through out of over 45 sales. Two were due to an unreasonable lender with regards to market value, and the other was from a seller who just gave up.
“Pros”
- Avoiding the stigma, and credit effect of a foreclosure on your credit. This is the main reason to short sell. If you want to be a homeowner again in the near future this is the way to go. A short sale can be much better to recover from than a foreclosure. Just think when you want to make an application for a new home loan.
- Right now on primary homes the 1099 income has no tax consequences. If you short sell a primary home and the lender agrees to a short sale the taxable income is exempt of taxes, up to 2 million dollars. Please note that this does not apply to investment properties. There is other causes for exemption of taxes but that’s another post.
- Your neighbors will benefit from you short selling vs foreclosing. A foreclosure will typically sell for less than a short sale. It takes time for a home to foreclose, then get re marketed by the bank, In that time, the home’s condition can go down hill fast. Here in Florida, a home closed up with no A/C will only last so long. In a short sale, the amount of home vacancy is reduced thereby helping the neighborhoods appeal, and resale values.
I am an advocate for the short sales over foreclosure.
Obviously I have an interest as a real estate agent thats how I make a living. I graduated with a degree for psychology, and social work. Helping homeowners in tough situations is very rewarding for me. I have helped my customers negotiate with lenders for reduced payments and loan modifications, and if that doesn’t work out, helping them get out of their home, and avoid foreclosure. My customers that have had successful short sales will be back sooner than later to having normal credit, and the possibility of home ownership. That’s what I call “social work”!
Sellers can get to a point where they are ready to just give up, but at these darkest moments we have to be reminded of the long term goal. The temporary pain of showings, negotiating offers, and following up with lenders can aggravate even the most patient home seller, and agent too.
The outcome does justify the process.
If you need help buying or selling real estate in Manatee County please consider me for the job. I have been a top producing agent here in Manatee County for the past 7 years.
I am an Experienced short sale agent and I would be happy to discuss your unique situation and give you advice that you need. Don’t go it alone. Call me today
Joe Murphy 941-780-3260 cell/txt
joe@manateemoves.com
www.manateemoves.com
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