Understanding the Benefits of a Short Sale

3 min read

If you are thinking about a short sale, it helps to understand why it can be a strong option for homeowners who are either facing foreclosure or owe more on their mortgage than their property is worth.

A short sale lets you sell your home for less than the balance owed, with the lender's approval. Compared to a foreclosure, a well-handled short sale can offer meaningful benefits, including the possibility of having the deficiency balance waived and a shorter wait before you can buy again.

Common Short Sale Benefits

While every situation is different and program terms change over time, homeowners who pursue a short sale often see advantages such as the following:

• Relief from the deficiency balance, so you are not left owing the difference after the sale.
• Possible relocation assistance to help with moving costs.
• Help releasing any second liens on the property.
• Avoiding a promissory note for the remaining debt.

Tax Considerations

In many cases, taxes you might otherwise owe on forgiven mortgage debt may be reduced or waived. Tax rules change and depend on your personal situation, so always confirm the details with your accountant or CPA, who can explain how they apply to you.

A Faster Path Back to Homeownership

One of the biggest advantages is timing. Many homeowners who choose a short sale instead of going through foreclosure are able to buy a home again in as little as two years from the date of the short sale.

Every short sale is unique, and the right strategy depends on your lender and your circumstances. Speaking with an experienced short sale professional can help you understand your options and decide whether a short sale is the right move for you.