Short
Sale
As of late I have been getting many
clients who are involved in short sales or at least are
hoping to get out of a bad situation with a short sale.
Basically a short sale is when the bank agrees to accept
less than the full balance of your full obligation. Some
banks will go this route because they end up losing more
money going through the foreclosure process. This is the
most basic definition and this is all you really need to
know because the rest of the process is really bank
specific. The real question here and the one you should
worry about is will the bank go after you for the
difference after the short sale? The answer usually is no
if everything is in writing and all parties agree. But
until you have that in writing DO NOT COUNT ON IT. I also
know for a fact that most short sales are unsuccessful so
putting all your faith in the process can be disheartening.
If the short sale is lingering you are probably just better
off wiping the slate clean with bankruptcy and moving on
with your life. One last point on a short sale is that the
IRS can treat the difference of what you sold the property
for and what you owe on it as taxable therefore subjecting
you to tax liability that you probably cannot pay anyway
because of this very situation!