In real estate, a short sale (also called "Short Pay" or "Pay Off") is when a bank or mortgage lender agrees to discount a loan balance due to an economic hardship on the part of the mortgagor. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender in full satisfaction of the debt. The difference between the selling price and amount owed is called 'forgiven debt', which is taxable income to the seller. In such instances, the lender would have the right to approve or disapprove of a proposed sale.

The listing agreement that you sign with any realtor must include: "The seller's obligation to perform on this contract is subject to the approval of the lien holders on the property. The Seller may cancel this agreement prior to the ending date of the listing period without advance notice to the broker and without advance notice to the broker and without payment of a commission or any other consideration, if the seller tenders a Deed-in-Lieu of Foreclosure." It is very important for you to have this language in the listing agreement. If you do not, you may be liable to pay real estate commissions even if you do not sell your house! iSanDiegoRealEstate uses a Short Sale Addendum to include this language in our listing contract for short sales.

San Diego Foreclosure

Foreclosure is the legal proceeding in which a mortgagee, usually a lender, obtains a court ordered termination of a mortgagor's equitable right of redemption. Usually a lender obtains a security interest from a borrower who mortgages or pledges an asset like a house to secure the loan. If the borrower defaults and the lender tries to repossess the property, courts of equity can grant the owner the right of redemption if the borrower repays the debt. When this equitable right exists, the lender cannot be sure that it can successfully repossess the property, thus the lender seeks to foreclose the equitable right of redemption. The entire debt owed will become taxable income to the borrower.
 

Why is a short sale better than a foreclosure?

Foreclosure is not a good option since it can adversely affect your credit record for up to 10 years. Typically on a short sale, the loan will show up as “paid" on your credit report; however there can be a notation that says "settled for less than originally owed.“ This is much more favorable than having a foreclosure on your credit report. Better credit means you will be able to purchase a home a lot sooner - usually in 18 months.

We also provide the option of staying in your home. How would you like to keep your home?

Through iSanDiegoRealEstate's Short Sale Program, we will:

	Market your Home to Sell very Quickly!
	Negotiate the Best Price for your Home
	Help you Avoid Foreclosure and Bankruptcy
	Help Preserve Your Credit
	Help Eliminate Mortgage Debt
	Relieve most of the Stress so you can Move On
	Do All of this at No Cost to You!

All Subject to Lender Approval.
 

For more information about Short Sales please visit our affiliate site: San Diego Short Pay

Give us a call for a FREE, no obligation consultation. We will be happy to let you know your options.

(619) 890-7447 or Email Us

Notice:  The information provided is for general reference only and is not to be construed as tax or legal advice. Consult your income tax preparer and/or attorney for specific details regarding your individual situation.