REAL ESTATE / Short Sales

Short Sales

What is a short sale?

A short sale is the term used to describe the sale of a property for less than the amount owed on the mortgage. Lenders prefer a short sale rather than a foreclosure due to the additional fees and costs associated with foreclosure.

Do you need a lawyer to do a short sale?

Real estate agents are in the business of selling homes. They make a commission and may not have your best interests at heart. An attorney works for you, and has an ethical responsibility to represent you and protect your best interests. Additionally, Real Estate agents are neither trained nor qualified to give legal advice and often do not understand the complex and rapidly changing laws affecting short sales.

Although the lenders may forgive the difference between the property’s value and the mortgage balance (called a deficiency) in a short sale, they do not always release the seller from the personal liability. The banks have the legal right to pursue the seller for that deficiency by garnishing future wages or attaching bank accounts. You need an attorney to protect your rights and make certain that the bank releases you from personal liability.

LJ Law can help you obtain a short sale if:

  • you have suffered a hardship
  • your mortgage is more than the property is worth
  • you have to relocate
  • you are concerned about a deficiency judgment
  • you have a second mortgage on your property
  • you want to avoid a foreclosure

We will be with you every step of the way to make sure the process is as painless and stress-free as possible and to assure you that the lender will not be pursuing you for an outstanding balance for years to come.

Tax consequences

Anytime a debt is forgiven, tax consequences may occur. Any amount of money a bank writes off in agreeing to sell a home as part of a short sale may become taxable when sellers file their income taxes. We recommend you seek the advice of a qualified tax professional.

 

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