Short Sale Division
Looking to avoid Foreclosure? Click here to Schedule a free over the phone short sale consultation
What is a short sale?
A Short Sale is when a seller owes more money to the bank on a property than the sale proceeds will cover and is unable to continue making mortgage payments. The property is offered for sale by a Real Estate brokerage and marketed as a Short Sale listing. Any offer received is approved or disapproved by the bank holding the mortgage. Short Sales are not foreclosures. Typically Short Sales happen when home owners are no longer able to meet the monthly obligation due to health job or other hardships. Often times buyers see this as an opportunity for a great deal.
How does it work?
McMahon Phillips Real Estate will determine your home market value less what is owed. If more is owed than the sale proceeds will generate it will be marketed as a Short Sale. You, the owner will provide detailed information to show the hardship scenario and inability to continue paying on the loan. McMahon Phillips will market your home for sale to the fullest extent possible and negotiate with the bank on your behalf.
What are the advantages?
Mainly avoiding a foreclosure and bankruptcy. Also it will be less damaging to your credit rating than a foreclosure. Also enables you to move on without the burden of too much of a mortgage debt. Avoid having a foreclosure or Bankruptcy on your credit for seven years.
How does it affect the owners credit?
Late payments leading up to a Short Sale will negatively impact your credit however if your bank accepts a Short Sale and does not negatively report the short sale will not in itself negatively impact your credit score.
What are the drawbacks?
Any debt that is relieved will typically be treated by the IRS as taxable income in the year of the Short Sale. A qualified CPA or tax consultant should be sought out for advice. McMahon Phillips will provide referrals to qualified professionals.
Why would someone want to do this?
Of course a Short Sale is a last ditch effort to preserve credit in difficult times. If it's possible to continue making payments it is best to do so. If it is not possible, a Short Sale may be your best alternative. Banks will consider a short sale as an alternative to costly foreclosure proceedings, lost payments, remarketing costs and reconditioning.
What are the alternatives?
Apply to your lender for a new payment schedule if possible and allowed by the bank. If not, as is often the case, foreclosure and bankruptcy. Forbearance – An agreement between a mortgage company and a borrower in which the borrower promises to stay current on the mortgage going forward and agrees to a repayment plan for delinquent payments and costs and fees associated with the foreclosure action. A Forbearance Agreement is a tool that allows the borrower to keep the property.How to contact us for help with your questions:
You can call us at 877-608-1672 or email us at info@mcmahonphillips.com with your questions.
Difficult times go hand in hand with a Short Sale. We here at McMahon Phillips Real Estate are experienced in dealing with the banks on our clients behalf and go above and beyond to help our clients in a typically difficult and stressful time.
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