What Could a Short Sale Cost You? by Nancy Niblett
It seems everyone thinks that selling their home as a short sale is a great way to bail on their responsibility but it is not always an ideal situation. You need to take all aspects into consideration before deciding that you need or should think about short selling your home. First and foremost is do you really have a hardship that dictates that you even qualify for a short sale.
You also need to consider what a short sale really could cost you in the end. I am sure you have heard that it will not cost you anything to short sale your home. That is true in certain situations. Yes, the closing costs and realtor fees are not paid out of your pocket but you could be liable for other costs.
If you are thinking of selling your investment or rental home as a short sale then you could be liable for the entire amount that then bank has had to write off as your home is not protected under the homestead act since you are not residing in the home. Another cost you could very well be liable for is to be taxed on the loss. Yes, the IRS may very well tax you on a 1099 for the difference that was written off.
You may have real estate or other type of liens on the property that will likely not go away but continue to follow you and continue to accrue interest and penalties so be sure there are not current liens on the home.
If you decide to short sale your home and then find out that you will be liable for costs later on down the line but you have entered into a purchase agreement and the short sale has been approved so you decide to cancel the sale of the home you could also be liable for the brokers fees, and the buyers losses.
As you can see entering into a short sale on your personal property and especially on an investment home can be a very costly idea. You need to seek advice both from an attorney and an accountant to make sure you know all of the risks involved.
Homeowners are turning to their real estate professional to answer all of their questions but as a real estate agent in one of the highest foreclosure and short sale states I can tell you that we are not qualified to give out this type of advice. Unfortunately, many real estate agents perceive themselves as specialist in these cases but do not rely on their information or advice. It could cost you dearly in the end.
Best advice if you have an investment home is to rent it out, rentals go very fast right now.
Find a top realtor or a great home at a great price in Gilbert, AZ at Affordable Housing in Gilbert Arizona or in Tempe, Arizona Affordable Housing in Tempe Arizona or in Chandler, Arizona at Affordable Housing in Chandler Arizona
About the Author
Nancy Niblett is a highly respected and awarded real estate professional working in the Phoenix Metro area. She has won many production and culture awards including Phoenix Business Journals top 50 Individual Agents for the past seveeral years.
Short Sales, RE Scott Real Estate Talk
