So you want a short sale on your home...

It has come time to sell your family home, and you realise that there is not going to be enough to pay off your mortgage and the home equity loan. So you want a short sale on your home. First we must find out if you qualify for a Short Sale.

Today I had a fellow Realtor come to me asking questions about working a short sale for her client. His whole thought process for doing the short sale was to make his home equity loan of about $17,000 go away so he can pocket approx. $4,500 when his sale closed. One this to keep in mind is once you are approved for a short sale, you the homeowner, can not profit from the sale. Keep in mind if the lender is taking a loss on the note, they are not going to allow you to get money from the sale of your home.

Another thing to keep in mind when doing a short sale is the Possible Tax Consequences. The Seller receives a 1099 for the DISCOUNTED amount. The IRS looks at the discounted amount as Income. When all has been approved and you are ready for The Closing. Keep in mind that ONLY after the lender(s) has approved the final HUD-1 are you authorized to close !

Below are links to additional information that will be useful in understanding the process of a short sale

Short Sales - Requirements

Short Sales - Savings to the Lender

Short Sales - Possible Tax Consequences

Short Sales - Negotiating The Sale

Short Sales - Submitting The Offer

Short Sales - The Closing

Also, please be sure to read The Short Sale Savior, by Elizabeth Weintraub, available in bookstores everywhere and at Amazon.com. This book has lots of great information and short sale experiences from Realtors who actually work them.