Short Sales

Short sales occur when the lender is willing to settle for less than the amount currently owed on the mortgage. The short sale is a preforeclosure process that, if successful, would mean your credit would be damaged for only two years, rather than seven to ten years if the home goes to foreclosure. And the IRS will not tax you on the difference between the amount of the mortgage and the short sale payoff.

This relatively new real estate phenomenon strongely appeared on the scene early last year in Southwest Florida, and has affected the market especially in Cape Coral where the housing inventory is bloated out of proportion. Pine Island is affected, but not as severely because the Island didn't have the speculation building and buying that was so prevelant in Cape Coral.

Our office recently handled the short sale of a house in Cape Coral, where the sellers owed $262,000 (the mortgage amount plus a prepayment penalty). We had listed the house, which was a four bedroom, two bath home built in 2003, at $262,000, and then lowered the price several times until it was listed at $139,000. We received an offer of $135,000. The lenders agreed to accept $124,000 and we closed the deal.

If you are faced with the possibility of a foreclosure, but would like another option to consider, please contact us. We could assist you in setting up a short sale with your lender to avoid a foreclosure and limit the damage to your credit. The short sale takes longer than a normal sale and the lender has the final decision about the sale price, but it is an option that is better than a foreclosure. Call today for more information about short sales!