Over a year ago, we published an article on short sales which included precautions concerning the pitfalls and outlined some of the benefits that could be encountered in such a transaction.
In the last month, our real estate board has been brought up-to-date on further advantages and pitfalls of the short sale transaction by two attorneys.
These attorneys specialize in helping homeowners navigate the correct strategy if they find themselves in a situation when their home is in risk of foreclosure.
The challenge if you cannot make your home payments or are upside down on your home’s value is there’s not a one size fits all solution.
Further complications may arise if you have a second mortgage or a home equity loan.
As a result of the complex financial laws, many real estate firms are reluctant to handle short sales without the homeowner seeking professional legal and tax advice.
As one of the attorneys explained, a homeowner may be better off with other financial remedies than trying to short sale their home.
In the event the homeowner short sold their home, they may be precluded from filing bankruptcy and may have given up more in the process than was necessary.
It was pointed out that some Valley homeowners did not realize what they were signing when they reached a self negotiated agreement with the lender to short sale their property.
The lender in some cases had the borrower sign an agreement which still held them liable for the loan balance minus the funds received on the sale of the property.
The attorneys advised that you should get a full release from any recourse in respect to your debt.
This sounds like a broken record, but if you find yourself in financial jeopardy, it is imperative that you seek legal and tax advice.
The laws are complicated and ever changing.
You need a specialized professional on your side to negotiate with your lender.
A professional will have experience and firsthand knowledge of the individuals on the lender side, which will allow the transaction to progress in a smooth and timely fashion while maintaining the protection of your interests.
Ray Pugel is a designated broker for Coldwell Banker Bishop Realty. Contact him at (928) 474-2216.