"Jean Powers Alameda and Contra Costa Real Estate"

IT’S YOUR MOVE

Short Sales:  An Alternative to Foreclosure

By “ Your Angels in Real Estate”

Kane & Associates

As we all know, many individuals and families these days have unfortunately fallen into serious troubles with the loans they have taken out to purchase properties.  Many property owners have found themselves in the situation in which they cannot pay the loan amounts for the money they borrowed. 

To make matters worse, the properties have dropped in value and often are not worth the amount of money necessary to pay off their loans. This is what is known in the real estate business as being “upside down.”

When faced with a situation like this, many owners feel that their only option is to default on their loans, walk away from their homes, and let the banks take ownership of them through foreclosure.

Is that their only option?  The answer is NO.   The borrower could possibly take advantage of another option known in the real estate world as a “Short Sale”.

A short sale occurs when a lender agrees to accept less than what the borrower owes on the loan amount.

 Lenders are often willing to do a Short Sale and work with the borrower so they do not have to incur the legal and other expenses of foreclosing on delinquent borrowers, to avoid having to maintain the properties and to incur the other expenses necessary to sell the property as an REO, or bank-owned property.

It is always advised to seek the counsel of a CPA, tax accountant or attorney before doing this to be sure you understand any tax, legal and credit consequences of this process. Short Sales require organization, time, patience, knowledge and excellent negotiation skills.  Short Sales are not an easy process and not all lenders are open to this option.  But if you have the right agent on your side to help you, this can often be a successful outcome. 

“Your Angels in Real Estate” REALTORS at Kane and Associates can be reached at: