What You Have To Know About 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 Counseling Certificate.

With short sale, the rest of the homeowner’s debt is forgiven. Rather than suffer the lengthy and expensive foreclosure process, a homeowner agrees to a short sale though the sale of your Suffolk  VA home, for instance is less than the owner owes on the mortgage.

Perhaps, foreclosure is not the only option. Short Sales are good options. For one, a potential buyer will get the home at a reduced price. The Seller will get out of the mortgage liability and will definitely not face bankruptcy. On the hand, the lender will not be facing the arduous protracted process of foreclosure even if he agreed to a loss from accepting a short sale.

Although a better option than foreclosure, waiting for the lender to agree to a short sale can be lengthy and hard. But if you’re on the way to short sale your Homes for Sale in Suffolk Virginia, 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 sure how the short sale will be reported to 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. Make certain that you are well-informed about the tax repurcussions.. So, if your Home in Suffolk Virginia 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. Foreclosure doesn’t have any credit advantage over Short Sale yet, the latter is an advantage over the former if you ever decide to buy another home.