| In these difficult economic times, financial | | | | house to. The proceedings of the sale will go to |
| hardships and job layoffs are very common due | | | | the lender in lieu of your loans. Most lenders waive |
| to which there are many home owners who are | | | | of the difference amount that you still owe them. |
| unable to pay their mortgage dues. Falling real | | | | Lenders agree for a short sale to avoid the |
| estate prices have made the situation even | | | | hassles and expenditure of a foreclosure. For the |
| worse. For most, this means going through tough | | | | owner of the house, it will be a win-win situation |
| and embarrassing foreclosure procedures. | | | | where he can settle his debts and still be financially |
| However, many do not realize that home short | | | | viable without a foreclosure entry in his credit |
| sales can save their dignity at these times. | | | | report. |
| When the current market worth of a house has | | | | There are a few things that you will have to be |
| become much lesser than the actual mortgage | | | | careful about. You will have to make sure what |
| dues against it, it becomes impossible to just sell | | | | happens to the difference amount after the short |
| your house and settle all the loans. In situations | | | | sale. Obtain in writing from your lender that it will |
| like these, you can opt for home short sale as a | | | | be waived off completely. Do not forget to ask |
| method to clear your debts or at least minimize it. | | | | the lender how this short sale will be reported in |
| This can be considered as a type of settlement | | | | your credit report. You cannot avoid a negative |
| with your lender, wherein you sell your house for | | | | report, but still it will be better than having a |
| whatever it is worth currently, and pay that | | | | foreclosure entry. Consult a tax advisor. The |
| amount against your debts. The remaining amount | | | | deficient amount that your lender has waived off |
| is usually forgiven. | | | | might be considered as revenue and you might be |
| The first thing you will need to do is assess the | | | | taxed for that. |
| current value of your property. You will also need | | | | Short selling also has its own drawbacks. For one, |
| to calculate the total of all your current debts and | | | | you will have to move out of your house. You will |
| see the difference between the two. This value is | | | | have a negative rating in your credit report for |
| bound to be a negative value (debts > asset | | | | the next 7 years. If you are involving a third |
| worth). | | | | party to mediate and facilitate the short sale, you |
| You will now need to contact your lender and try | | | | will have to take care of their payment as well. |
| and find out their procedures and requirements | | | | And, there are chances that you might end up |
| for short selling your property. Some documents | | | | paying taxes for the waived loan amount. |
| like a hardship letter, bank statements, current | | | | So before blindly going for foreclosure or a short |
| income and assets, estimated current worth of | | | | sale, it is important that you consult with |
| your house, etc. Need to be submitted. Depending | | | | someone knowledgeable about all the pros and |
| on the lender, this procedure might take even up | | | | cons of your current situation, and then take a |
| to 3 months for processing. Once it is approved, | | | | decision accordingly. |
| you can look for a prospective buyer to sell your | | | | |