Short sales.

Many people in this economy are facing very difficult choices. With layoffs and pay cuts, many home owners are struggling to pay mortgage payments. There is no reason for people to have to go through a foreclosure! Many homeowners are embarrassed to admit they are in trouble. The fact is, banks are willing to negotiate sale prices on homes that are threatened with foreclosure. The lenders work closely with the Realtor and Title companies to come up with a fair price for the home. This is called a short sale. The lender is willing to take a loss on the balance owed because, in the long run, it is more costly for them to foreclose. This also gives the homeowner a scheduled and organized way to moved out of the home. The credit ramifications are far less worse with a short sale than a foreclosure. It is the job of the Realtor to negotiate with the lender to "write off" the difference, if any, that is owed after the sale. Although, the homeowner must file a 1099 in the amount of the difference, it is considered profit and falls under the capital gains tax law. If you have lived in the home for two years or more, you pay no taxes on the difference up to 250k if single and 500k if married.

However, if the home is foreclosed and sold again at a lower price than the balance, the lender may file a judgment against the original owner for repayment of the difference. This may force the original owner into bankruptcy.

The lender pays all the fees to sell the house and the homeowner walks away with some dignity and no foreclosure status on their credit.

Please note that this can be a very lengthy process but the homeowner may continue to live in the home while the sale is being negotiated.

If you, a friend, or family member could benefit from a short sale, please do not hesitate to call me. Do not let your home fall into foreclosure.