If you owe more on your mortgage than the value of your home, you might be wondering if selling your house is even possible. Not only can you sell your home in this situation, but selling might be the best option to avoid negative credit implications and possible foreclosure. This type of sale is called a “short sale” and it requires your lender to reduce the loan balance so that the home can be sold. You should never use a traditional real estate agent to complete a short sale. Rather, you need the expertise and skill of an Attorney/Realtor. There is absolutely no cost to you for an Attorney/Realtor because the lender has to pay all the costs and fees in a short sale.
What is a “short sale” and does that apply to me?
When a homeowner owes more on their mortgage loan than the home is worth, a sale of the home cannot generate enough money to pay off the mortgage. In such a situation, lenders allow the homeowner to sell the home without having to pay the mortgage in full. This is known as a short sale. All the costs and fees of the sale must come from the lender who is not getting a full payment on the mortgage. This means they are “short” of a full payoff, hence the term “short sale.” Clearly, if there is no money to pay the mortgage in full, that means the homeowner is not able to get money from the sale. However, Lawyers Realty Group negotiates relocation money for the homeowner so that there is some financial help in moving forward.
Forgiveness of any remaining loan balance
In a short sale, you can sell your home for less than the remaining balance on your mortgage. When handled properly by an experienced Attorney/Realtor, a short sale can put you in a more financially advantageous position and mitigate the impact on your credit score by avoiding a foreclosure. If the law is properly applied, you will not be obligated on any remaining loan balance, though there may be taxation implications.
Because these tax implications, as well as legal and contractual risks for a short sale, it is imperative that you have an Attorney/Realtor throughout the entire process. A traditional real estate agent is prohibited from even discussing the tax and legal ramifications of a short sale, leaving you vulnerable to continued financial obligations.
Before making any decisions, it is crucial to gather legal, financial, and real estate advice to ensure your financial interests are completely protected. At Lawyers Realty Group, our experienced Attorney/Realtor can provide insights tailored to your specific circumstances and help you navigate the complexities of selling a home when you owe more than it's worth. Call (949) 264-0966 today for a free legal analysis of your situation. There is absolutely no cost or obligation.
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