What is a Strategic Short sale? By Pasadena short sale agents Munson Realty

What is a Strategic Short sale?

By Pasadena short sale agents Munson Realty

What is a Strategic Short sale? By now short sales have been around long enough for most of us to grasp it’s concept, but as a brief review, here is what a traditional short sale is: When a seller must sell their home for less than they owe on the property, and their lender agrees to take less than what the seller owes on the note, that is a short sale.

Traditionally an underwater seller must prove some sort of hardship like job loss, death of a spouse, illness or some other unfortunate circumstance to qualify for a short sale.

But what about those who have no real hardship but have seen the value of their properties plummet…and as pure business decision want out?

Enter the “Strategic Short Sale”…let’s now explain “What is a strategic short sale”-

A Strategic Short Sale is when homeowners who purchased their homes at the peak of the market are now watching those values drop like stones and have decided it no longer makes sense to make payments on a property that has lost so much value.  Even though they can still make their payments and they have no other real “hardship”, they’ve decided to short sale their property. In essence they have “strategized” their way out of a declining investment.

Will lenders allow sellers to do a strategic short sale without a hardship?

The answer is very often yes. More and more often, the short sale is approved. A hardship isn’t always necessary as the bank would often prefer to do strategic short sale than take it back and sell it later for less.

What are the benefits of a strategic short sale?

• You can begin rebuilding your bank account with the money you are saving.
• You can live in your home while it’s being sold and save some cash to get you off to a good recovery.
• You may qualify for $3,000 in relocation expenses from HAFA
• The impact of a short sale to your credit is less that of a foreclosure.

What’s the downside?

• Even though the impact to your credit of a short sale is less that of a foreclosure your will take a hit.
• You may be subject to taxes for the “short” of the sale. Although thanks to to SB 458 … When lender has agreed to a short sale on a home, SB 458 insures that all lien holders (the first and second loans) must consider the outstanding balance as completely paid off and the short seller (homeowner) will not be held responsible for any future payments on the home.

• You may be asked to bring a cash settlement to closing, sign a promissory note, or both.
• You won’t be able to purchase another house with a conventional loan for at least 2 years.

Should you do a strategic short sale? Clearly this is a very personal decision and you really need to consult with your tax person and possibly your attorney to see how this will impact you in their areas of expertise. But ultimately you may decide that even though you can make the payments now,  you are struggling to do so…or you can’t manage to save for anything else, it may simply be a wise business decision for you to move on and get a fresh start.

“What is a strategic short sale” was brought to you by Pasadena sort sale agents Munson Realty. If you need help deciding if you should stay, walk away or do a strategic short sale, give us a call at 626.376.9732. Our consultations are no cost and we’ll help you make an educated decision of whether or not a strategic short sale is the right move for you.

Copyright © 2011 By Stephen Munson-Munson Realty, Pasadena short sale agents| What is a strategic short sale * What is a strategic short sale ,strategic short sale,Pasadena short sales,Pasadena short sale agents*

What is a Strategic Short sale? By Pasadena short sale agents Munson Realty