• home
• email us

Short Sales: How can they help you?

A short sale is essentially the process where someone sells a piece of real estate for less than the outstanding balance owed on a loan for that property. These sales typically occur when the borrower does not have the ability to pay off the loan and the lending financial institution comes to the conclusion that it would be better to accept a partial payment (the money from the sale of the property) rather than be forced to follow through with a messy foreclosure. This process is of mutual benefit because the lender can reach a solution easily, while the borrower can resolve his/her debt and face weakened negative credit effects.

A short sale is considered to be a settlement and will negatively affect the borrower's credit for seven years. However, it is well-documented that the effects of a short sale are much less significant than that of a foreclosure or a bankruptcy.

Participating in a short sale offers a number of potential advantages to both parties. The borrower will not be forced to go through the struggle of a foreclosure and ends up with less of an impact on their credit report. The exact terms of a short sale are always decided upon by both the lender and the seller. When the sale is successful, the seller typically is absolved of any remaining debt.

Financial institutions also benefit greatly from a short sale. They no longer will be faced to follow through with the legal battle of a foreclosure and then have to deal with selling the property in order to get their money back. So, if they can make this process simpler, such as by accepting an offer for a short sale, they more than likely will do so.

Always keep in mind that banks are not fond of having inventory just lying around. They also do not enjoy having massive outstanding balances due to a borrower's inability to pay. Plus, if a property is put up for auction, lenders usually lose out massively! You can use this to your advantage and as leverage against your lender.

However, the process isn't always simple and it is best to consult an attorney or other legal professional to assist you in conducting a short sale. Short Sale attorneys have a lot of experience and legal knowledge in this field so they can work to make the deal get approved and to make it happen quickly. Furthermore, if additional litigation ensures, your attorney will represent you and protect your interests. They can also advise you in regards to the numerous tax issues that arise from a short sale. Finally, a short sale may not always be your best option, and only an attorney would be able to accurately determine this.

There is also a difference between a release of mortgage, release of lien and a release of the outstanding loan balance - and the average citizen does not have enough knowledge to understand the difference or to determine which is the best solution in their case, and that is also where an attorney can step in to explain things to you. And best of all - attorneys will be able to find leverage over your lender, resulting in the best negotiation possible.

For a free consultation about a New Jersey property tax appeal, call Sharit & Deliyannis at 201-488-6338 or email: info[at]sharitdeliyannis.com