Short Sale????

[lryan361]

We are questioning if we should do a short sale. Our realtor suggested this idea this evening. We bought 2 years ago at 159,000. Right now we will be lucky to get 150,000. We live in Florida and desparately want to move back up north. We bought high (not realizing the market would bottom out but who did know) We bought with a 80/20 thinking we would fix our home up which we did and flip it. We have about 6,000 in savings and are willing to cash in a large amount of retirement. We just lowered our price to 154,900 and doubt we will even get that. We are current with our mortgage right now but are working 2 and 3 jobs to stay current.
Our questions are:
Will this look bad on our credit report?
Will we still have to cash in our retirement?
Are there a lot of tax issues with this?
Is it good to use one of the Short Sale Help places or should we call the lenders ourself?

We realize we have ourselves in a very big mess and regret ever moving here but we did and now we have to pay the price. Any advise or help would be greatly appreciated. We use this site a lot and feel the people on it have a lot of integrity. Thank you for any advise.

[aprazma]

You could use any agent of your choosing to negotiate with the lender on your short sale, but preferably one with short sale experience. Ask them to tell you what their short sale acceptance rate is with the bank, and to walk you through the process.

There could be tax issues. If the lender forgives the debt differential it could be taxable income. Otherwise, the lender could obtain a judgment for the balance, which could appear on your credit report.

I do not think you should cash in your retirement or any other assets that are possibly exempt.

This is not tax or legal advice. Consult an appropriate professional.

[Short Sale Specialist]

Consider contacting National Short Sale Center. I've found them able to answer my questions., becuase they've conducted 100's of short sales.

[thedeallocator]

Use an agent with shortsale experience. Some states are also offering help. check with your state or county gov't.

[lryan361]

Our realtor has done some short sales but at the beginning she has us work with the lendors and then will help as time goes on and we have a buyer. We paid 159,000 we started February 1st at 174,000 now dropped today to 139,900 and even then will be lucky if we have any traffic. So depressing. The lendors are telling us until we have a buyer they can't really say but that they will work us. The 1st lendor brought in their own realtor and we asked for their estimation of the price and they wouldn't tell us which I don't think makes sense. We are just hoping both lendors will work with us. We are current so far on our payments working 2 and 3 jobs each but have read where they won't work with us unless your late. That is crazy. Does anyone know if that is true? We know that we can't go at this pace to keep paying the payments and will eventually foreclose if they won't short sale.

[thedeallocator]

The Lender must have sent a broker to do what they call a BPO - broker price oppinion. This is not unusual. This lender appears to be willing to work with you. Tell your Broker to advertise the property agressively, especially after the price has been reduced.
Goodluck
[/URL][URL="http://www.doyenrealty.com/atlantaforeclosuredeals/"]
(http://www.AtlantaForeclosureDeals.com)

[HomeSurfer]

We are current so far on our payments working 2 and 3 jobs each but have read where they won't work with us unless your late. That is crazy. Does anyone know if that is true? We know that we can't go at this pace to keep paying the payments and will eventually foreclose if they won't short sale.
The way the lender sees it, it isn't their fault the property declined in value. They lent you money that you agreed to pay back. If you don't pay them back, you're welching on the deal. Even if the collateral has declined in value, you still owe the money.

A short sale is sort of an organized welch. The lender knows that they are going to lose money on the loan so they take what they can get before the situation gets worse.

Of course, sometimes the lender doesn't know the situation is so bad that you aren't going to live up to your promise to make the monthly payments until you begin missing payments.