All cities have been hit by foreclosures. Now with the government calling for all foreclosures in these United States to be halted because of faulty paperwork everyone will be talking about it. I guess there is no better time than now to discuss a few risks about this real-estate transaction:
1.Â Â Â Â Â Walking away is better than a short sale:
Youâ€™re taking a risk. There is a risk of deficiency judgment which I have discussed in a previous blog. There could be some tax consequences involved. There are some huge consequences that legal and tax attorneys will discuss with you before you decide to walk away. Thatâ€™s my advice. Donâ€™t walk away until youâ€™ve heard all sides and please donâ€™t listen to your friends and family. I know they mean well, but they donâ€™t have the experience necessary to make a good judgment (unless they are a legal or tax attorney). Therefore, walking away is not better than a short sale (in most cases, but not all).
2.Â Â Â Â Â Short-selling your property will be the same as Quit Claim Deed:
Another risk. In short, a quit claim deed is a deed that transfers part or all interest in piece of real estate from one person to another. You are still responsible for your loan amount until the new owner refinances. Donâ€™t fall for investors saying that if you do a quit claim deed with them they will let you stay in your home for your original monthly payment. That wonâ€™t happen. Investors care only about profit, not you. Now that they have legal ownership over your home they can kick you out whenever they want. Simply stated, a quit claim deed is not a viable or wise option to stop the foreclosure process. Therefore, a short sale is not like a quit claim deed.
3.Â Â Â Â Â The bank/ loan company is obliged to do certain things:
Wrong. They can refuse your short sale and just foreclose on you as Bank of America has done to most of their clients. They can ask for whatever they want (within their legal rights and thatâ€™s why you need legal counsel to know what they can and cannot do). It all depends on certain factors and who you are working with. Sometimes you win and sometimes you lose. Itâ€™s a crap shoot, but unlike Vegas you can come prepared and have a group of experts supporting your every dice roll. But until you do banks will do only what they want and not what you ask of them.
4.Â Â Â Â Â A short sale is simple and anyone can do it because there are simple guidelines:
Nope. False. Incorrect. Wrong. There is absolutely nothing standard or regular in a short sale transaction. Just like us humans they are all different. The more you do the better you get at it. The key component is negotiating. The key factor of negotiating is having experts doing the talking and paperwork for you. Thatâ€™s where I come in.
Donâ€™t assume anything. Question everything. I will do everything I can to help you. Please donâ€™t listen to one opinion or even two. If you talk to me please talk to someone else and then someone else. Thatâ€™s my advice. Until next time.