Myth: Sellers can file bankruptcy to remove any liens then short sale the house.
There are a lot of misconceptions out there when it comes to short sales, particularly when it comes to IRS tax liens, credit card liens, HOA liens, etc. A lot of agents think that the seller can just file bankruptcy and all the liens will be released and the home can be sold, but that does not work.
Myth: It’s best to let the buyer pay the third party fee.
It’s always in the best interest of the seller to obtain the highest possible offer on the property; it’s the listing agent’s fiduciary duty. The Debt Forgiveness Act expired in 2016 and is not likely to be renewed for 2017. In many cases, sellers of short sales will have to claim the deficiency as income.
Myth: It doesn’t matter if you’re living in the property when you short sale.
If the property was used as a rental property, second home or if you’ve already moved out, the seller will not qualify for relocation incentives.
Myth: Real estate agents should negotiate their own short sales.
Absolutely not! It is replete with legal issues, risk, and deficiency issues amounting to tens or hundreds of thousands of dollars of liability to the seller. Tax implications can be huge. A wide range of legal institutions and attorneys could be involved, from foreclosure attorney, bankruptcy attorney & courts, divorce attorneys, U.S. attorneys (tax liens), etc. Debt collectors, collection agencies, credit card companies and HOAs can all be roadblocks to successfully completing a short sale.
A short sale can be a difficult process; it’s important that you choose an agent with the specific knowledge and experience required to navigate a short sale. At STL Buy & Sell REALTORS®, we have agents who have received the Short Sale and Foreclosure Resource (SFR®) designation from the National Association of REALTORS. We have also partnered with Kayser Short Sale Law Center to negotiate short sales on behalf of our sellers.
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