What a Seller Considering a Short Sale Should Know
It is recommended that seller seek legal advice from a competent real estate agent or lawyer and speak to an accountant about short sale tax ramifications and ask about the Mortgage Forgiveness Dept Relief Act of 2007.
To be properly prepared, a seller who is asking a lender to consider a short sale should be prepared to provide their lender with the following information:
Hardship letter shortsale_: Statement of facts that describe how you got you’re your current financial predicament and requests the lender accept less than full payment on the loan.
Proof of Income and Assets - Your lender will want to know if you have any of the following: savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate. They are looking for something of value.
Copies of Most Recent Bank Statements
The seller will receive no cash at the close of the transaction and may be required to bring some cash to closing. Furthermore, the seller may incur imputed income or capital gains taxes as a result of the bank/lenders forgiveness of debt.
Short Sales in Brevard County
Due to the drastic downturn in property value over the past couple of years in Brevard County, there are a large number of short sales listed for sale. Not all listing agents have done their homework to be sure a listing will be considered by the bank/lender for a short sale. Be warned! These sales often fail to close because:
The bank/lender is not convinced of the seller’s hardship and the seller actually has assets to bridge the gap on the loss.
The seller is foreclosed upon during the long wait for the bank/lender’s acceptance of an offer.
The buyer moves on to another property rather than wait indefinitely for an agreement to be finalized.
The value of the property has dropped even more by the time the property is ready to close.