Distressed Home Owners: Have You Considered Short Sales?

by Donald Hanz on Finance Foreclosures

If you are facing the probability of foreclosure, you should exercise the option of short sales. While distressed home sales are not for the faint hearted, as a seller you have rights even when you are in foreclosure. Many homeowners prefer short sales before their homes are finalized for foreclosure as they can often find buyers who are willing to be flexible in order to have a profitable transaction.

We advice a word for caution for all distressed home owners and buyers; always get expert legal advice before you enter a short sales contract. However what happens if you can’t make a short sale? What do you need to do in order to stop foreclosures? While it’s commonly known that most homeowners don’t consider the fact that their home is in foreclosure as serious problem, it’s also commonly known that this is one problem that won’t go away. Nevertheless, there is a silver lining to every dark cloud and distressed home owners can now seek advice and help on the various options available to prevent repossession of their homes.

There are many organizations that help distressed home owners keep their home through various options such as forbearance, reinstatement, mortgage modifications, or different repayment plans. You can even discuss how the taxman will treat short sale or foreclosure. Called debt forgiveness, as a defaulter you could owe the federal government taxes despite having lost money during sale of your home.

Unfortunately, not everything is safe nowadays. And same is true for foreclosures and short sales. Not all short sale transactions are profitable, as the homebuyer has to complete all the pending payments along with the fees or pay off the mortgage completely. Besides, very few lenders allow a homebuyer to take on the existing obligation.