Saturday, May 5, 2012

Starting the short sale process

Question: I would like to put my home up for a short sale. How do I start? If anything occurs in my home (i.e. it incurs internal damages), will the bank come after me? Will the bank come after me for the difference in their short sale price and the amount I owe?

Response: To start the short sale process, you need to contact the bank first. You will have to fill out a package of documents and the bank must determine that you qualify for short sale. The bank is not a purchaser of your home, so the bank cannot come after you for broken things. Since your are selling your home to a 3rd party buyer, once the short sale takes place, you are not responsible for any damages to the home if the purchase is "as is" unless you have intentionally concealed the truth about some material defects of your home. When the bank agrees to do a short sale, they agree to cancel part of the debt that is non-recoverable under current market conditions and they write off that amount as their loss for the year. IRS will send you a form with the amount that was cancelled to report on your taxes. However, if the property is your primary residence, then you won't face any tax consequences.

In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.

The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information.
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