The term “short sale” is familiar to most people who watch the news regularly.
Stories about the “mortgage meltdown” and the “collapse of the housing bubble”
often mention short sales, usually in relation to homeowners who are underwater
(where your home is worth a great deal less then what is owed on your home).
Some homeowners utilize the short sale to as part of their financial planning strategy.
A short sale takes place when a home is sold for less than what is owed on the home.
Many times a short sale takes place when a homeowner is undergoing financial
hardship and falls behind on their mortgage payments, and is unable to repay the
debt by selling the house because they owe more to the bank than the home is worth.
A short sale may be a homeowners’ last chance to avoid foreclosure. Your attorney and
your tax advisor should be consulted regarding tax considerations.
It is extremely important to have an experienced attorney negotiate a short sale with your
bank, not a realtor. An experienced attorney is retained to look out for your best interests,
not to negotiate the short sale just to earn a commission.