Although we’ll probably spend most of our lives completely stable in the way of property, things don’t always go to plan. If you end up owing more on your mortgage than your house is worth, then you could end up having to sell it by short sale. While they’re a better alternative to a foreclosure, they can also have the potential for all kinds of complications and mishaps. Here’s a little advice on how to avoid these!
The first thing you can do to help yourself through this process is to find a real estate agent who’s fairly experienced with short sales. After all, you wouldn’t talk to a brain surgeon if you needed heart surgery. While you’re looking for an agent to handle your sale, be sure to dig a little deeper than what you’re given on their ad. Go looking, and you’ll find countless ads for real estate agents who claim to have extensive experience with short sales. In reality though, many of them will only have a few short sales under their belt. True, they might be able to show you a qualification for handling short sales. However, like with many things in life, nothing can come close to beating the experience of some short sale agents.
Another important tip is to seek out a lawyer. Sure, an experienced real estate agent will be able to organize the transaction with your bank, and let you know what you should expect out of the process. However, they certainly can’t bring the expertise of a lawyer to the table! While the expertise of a short sale real estate agent may make you feel at ease, there are certain legal issues tied to the whole process which you’ll need to discuss with a lawyer. If your lender might collect the balance on your loan in the future, then you may need to take steps to protect your other assets. A lawyer can also be a big help with working through the various tax implications you may not understand. As with the agent, you should find a law firm with short sale experience, like Cogburn Law Offices.
It’s also important to know that it’s possible to negotiate yourself out of a deficiency. When you’re negotiating a short sale, there will be a lot of lenders who won’t opt to release you from liability for the outstanding balance on your loan. That is, not for free! However, that doesn’t mean you can’t negotiate for a waiver. Overall, it’s pretty rare that a lender will refuse outright to negotiate a settlement. Some of them may get you to sign a note promising them at least a small portion of the balance. Others will ask for a lump sum. I won’t lie by telling you that you’ll like the figures they put in front of you. Remember though, you borrowed this money! Paying up front can often avoid many headaches in the future, so spend a lot of time considering it.
Hopefully, these tips will make your short sale experience a little less stressful!