Short Sales...when the only tool you have is a hammer, everything looks like a nail.
Lets face it...if you've purchased your home over the past few years or refinanced to withdraw equity, the current real estate market has not been kind to you. Add to this the downturn of our economy and you may be feeling financially stressed with a home that is underwater with your lender. Finances are tight, options are low what next??
Often this is where you decide to talk with a real estate agent or broker. One of the first discussions may well be a short sale. A short sale is used when a homeowner owes more to their lender or lenders than the home is worth in today's market.
What most real estate professionals are not equipped to talk about are all of your possible solutions. Granted, short sale may be the solution you chose in the end, but you owe it to yourself to consider all of your options.
By assembling a team which would include your tax preparer or CPA, a real estate attorney and your real estate broker you are now ready to review all of your options. Each has pros and cons so consider carefully.
Your general options include:
1) Loan Modification
4) Short Sale
Each of these have off shoots depending on your situation. Typically this whole discussion should start with a counseling session with a real estate attorney. Be prepared to discuss your current finances, any hardship you might be having, your income, expenses and investments.
The choice you make now will have lasting affects on your credit and may affect your ability to purchase a home in the future, so take your time, ask lots of questions and do not be afraid to invest a little money to pay for this consultation. A common scenario has a homeowner who sells their home via short sale and only later learns that they are still on the hook for the deficiency from the lender.
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