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Experiencing Foreclosure Short Sales And How To Get Through Them

Author : Ask Bill


There are many ways to avoid foreclosures and one of them is by having foreclosure short sales. If you are experiencing a major financial setback, you may need to sell your house in order to gain some financial stability back. But if your home is worth less than your mortgage, you might actually have to foreclose. A short sale may help salvage your credit and help you avoid foreclosure altogether. It may be your last attempt to stop foreclosure from happening but it may end up being the best thing you could do in an attempt to save your credit ratings.
Generally a short sale is when you sell your home for less than the amount due on the mortgage. Of course you may not be making any profit from the sale of your home but you may at least free yourself of mortgage debts. The sale process is not much different from that of a conventional sale but you may have to appoint a realtor who might be willing to help sell your home at a very low fee because you may not get any of the proceeds from the sale. If your bank or lender allows you to go ahead with foreclosure short sales, generally they might be willing to forgive the difference or, if they insist on getting the full due amount on your mortgage, get a deficiency judgment against you to make you pay the difference between the sale price and the original value of the mortgage. However, you may have to check your state’s regulations as there are some states that make it compulsory for lenders to forgive the difference in a short sale.
One of the things that you may have to do before proceeding with the bankruptcy short sale is to confirm the value of your home by having it appraised by a real estate broker or if you prefer you may do it yourself by conducting your own market analysis of the area and your home. After confirming the value you may want to consider other costs associated with the sale of your home such as advertising costs, broker fees as well as closing costs for the deal. It may be a good idea for you to discuss such costs with your mortgage broker so that you may include related legal fees in your calculations. You may also need to consult with your real estate broker on the taxes that you might have to pay from the sale of your home. Once you have all the figures totaled, you may need to subtract the amount of money owed against the property from the expected earnings of the sale. It might be from this number that your lender might consider whether to let you proceed with a short sale or otherwise.
If you have obtained permission from your lender to conduct a short sale, you may want to hire a lawyer to advice you on the procedure of conducting a short sale and perhaps an accountant to ensure that all tax implications in the short sale are dealt with accordingly just as in any real estate transaction. Your lawyer may come in handy when it is time to finalize the sale of your home with the purchaser.
Generally in a short sale, your new buyer will not assume your mortgage. You may use the proceeds of the short sale to pay off your mortgage directly to your lender while the buyer may need to get his own mortgage of the property.
It may be difficult for you to let go of your home at a very low price. However, you may want to bear in mind that your primary concern is to be rid of your mortgage debt and not to gain profit from the sale of your home. Therefore it is advisable that you do not focus too much on the price but rather on paying off your mortgage and be financially free.


Author's Resource Box

http://www.bills.com/foreclosure/
http://www.bills.com/bankruptcy/
http://www.bills.com/mortgage/

Article Source:
Articlebliss

Tags:   foreclosure short sales, bankruptcy short sale, mortgage

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Submitted : 2010-10-13    Word Count : 671    Times Viewed: 289