WHAT IS A SHORT SALE?

The term "short sale" can mean that:

1) The mortgage company will accept less than full payment and will release both the property and the debtors from the remaining balance of the debt; or

2) The mortgage company will accept less than full payment of the debt, will release the property from the mortgage, but will NOT release the individual debtors from the remaining unpaid balance of the debt.

We hear from lots of people who are interested in trying to do a short sale, but don't know which one they are trying to do or which one they want to do. The first kind leaves you in the clear, but the second variety brings you to seek the advice of a bankruptcy attorney.

Some short sales are of the second variety, and they can be worse than just doing nothing and letting the bank foreclose.

If you are doing a short sale, you should consult an accountant about the tax consequences. Under certain circumstances, the amount of the debt forgiveness can be taxable income.

These comments are for general information purposes only and are not intended to be legal advice. We recommend that you consult the attorney of your choice concerning the details of your case.

The Lersch Group offers a Short Sale package, which is available by clicking on the following link:   Short Sale package.pdf  You will need Adobe Reader to view this document.  If you do not have Adobe installed on your computer, we have a provided a link to a free version on the left side of this web page.

* LEGAL DISCLAIMER: The information contained in this is for general guidance on matters of interest only. The application and impact of laws can vary widely based on the specific facts involved. Accordingly, the information on this Site is provided with the understanding that it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. Before making any decision or taking any action, you should consult the appropriate accounting, tax, legal or real estate professional.