Short Sale Myths
A short sale can be a great option for a homeowner who can no longer afford to make their mortgage payments. Nevertheless, there is a lot of faulty information floating around concerning short sales that needs to be exposed.
Short Sale Myths…
1. Short Sales do not harm your credit score as bad as a foreclosure. A foreclosure on a credit report can ding a sellers credit 200-300 points. The same is true during a short sale. The benefit to a short sale is that your ability to purchase a home after having a short sale is typically quicker than during a foreclosure.
2. I do not have to pay back the debt I was forgiven. If your home was foreclosed upon or you short sale your home, it is important to negotiate with your lender to not pursue a deficiency judgement. If your lender decides not to write off the debt and send you a 1099 tax form they may decide to give you a deficiency judgement requiring you to pay back the loss you took on your home. Remember, this can happen in a foreclosure also. I believe you have a better chance of having this removed during a short sale. This is another good reason to have a good real estate agent working for you.
There are many reasons why a short sale can be a better decision than a foreclosure or bankruptcy. It is always important to seek legal council and tax advice before moving forward with a short sale.
If you would like to speak with my short sale team contact me.
Are You Missing Payments On Your Loudoun Home? What Is A Short Sale?
