The Short Sale In A Nutshell
When a Trustor can no longer pay a loan in full, what often follows is foreclosure or even bankruptcy. This is a very depressing financial situation, but it can be solved with a little known alternative: the short sale.
The short sale is the last option taken by the lender. When a lender signs a short sale, they are forgiving a certain amount of debt, and considering the loan paid in full.
A local real estate attorney should be consulted to determine whether the loan qualifies for a deficiency judgment or claim, as state laws vary. One should also consult an accountant to determine tax ramifications. The IRS may consider debt forgiveness as income. There is no guarantee that the lender will not legally pursuer a borrower for the difference between the amounts owed and the amount paid. This depends on individual state laws.
The amount of time for a short sale to get approved is difficult to guess. In other words, the short sale process is long and tedious. The lenders in short sales business usually say that it takes 21 days time for the approval to come through.
The tedious process of securing a short sale is sure to take a very, very long time. 21 days is the usual answer, should you ask the lender. But that's just a minimum, some cases may actually take twice that time to get approved.
Short Sale Strategy Overview
The full process of a short sale will include a contract, an Authorization to Release Information and the addendum. A warranty deed is a tool used in the process. Let's examine the process now, starting with the contract.
The process is quite simple to understand, it starts with the contract, then the authorization to release, and lastly the addendum. The warranty deed is also part of this whole process. What are really important to grasp in the process is the first two documents:
Contract: This can look like anything and can span from just a page to an entire mini book -it all depends on what it contains and how it's laid out. Just think of a generic contract, it can be really simple or really sophisticated. The addendum should be referred to, at any time the price is mentioned in the contract.
The basic document that contains nearly all vital info on conducting the transaction is contained in the addendum:
Origination of the contract
Date
Names of the parties involved
Address
Tip: It's advised to list both the legal address and the simple address in the addendum -for the purposes of clarity and transparency.
Any investor, that is, the lenders, should know that in the foreclosure process, there is the opportunity to acquire bargain property -certainly a valid reason to agree to short sale. - 23218
The short sale is the last option taken by the lender. When a lender signs a short sale, they are forgiving a certain amount of debt, and considering the loan paid in full.
A local real estate attorney should be consulted to determine whether the loan qualifies for a deficiency judgment or claim, as state laws vary. One should also consult an accountant to determine tax ramifications. The IRS may consider debt forgiveness as income. There is no guarantee that the lender will not legally pursuer a borrower for the difference between the amounts owed and the amount paid. This depends on individual state laws.
The amount of time for a short sale to get approved is difficult to guess. In other words, the short sale process is long and tedious. The lenders in short sales business usually say that it takes 21 days time for the approval to come through.
The tedious process of securing a short sale is sure to take a very, very long time. 21 days is the usual answer, should you ask the lender. But that's just a minimum, some cases may actually take twice that time to get approved.
Short Sale Strategy Overview
The full process of a short sale will include a contract, an Authorization to Release Information and the addendum. A warranty deed is a tool used in the process. Let's examine the process now, starting with the contract.
The process is quite simple to understand, it starts with the contract, then the authorization to release, and lastly the addendum. The warranty deed is also part of this whole process. What are really important to grasp in the process is the first two documents:
Contract: This can look like anything and can span from just a page to an entire mini book -it all depends on what it contains and how it's laid out. Just think of a generic contract, it can be really simple or really sophisticated. The addendum should be referred to, at any time the price is mentioned in the contract.
The basic document that contains nearly all vital info on conducting the transaction is contained in the addendum:
Origination of the contract
Date
Names of the parties involved
Address
Tip: It's advised to list both the legal address and the simple address in the addendum -for the purposes of clarity and transparency.
Any investor, that is, the lenders, should know that in the foreclosure process, there is the opportunity to acquire bargain property -certainly a valid reason to agree to short sale. - 23218
About the Author:
Know about short sale an alternatives to bankruptcy or foreclosure only at Don Burnham's website http://www.weknowthewayback.com. Visit today to know all about short sale!
posted by X - Men @ 12:43 AM
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