Short Sale Consequences

short sales tax consequences Short Sale ConsequencesShort Sale Consequences

A short sale is dependent on a buyer making an offer to purchase. If you do not receive an offer, you will not qualify for a short sale. So even if you meet all the other criteria, it is possible that no one will buy the short sale.

The short sale is also dependent on the lender accepting the buyer’s offer. If the lender rejects the offer, a short sale will not take place.

 

  • Tax Consequences – If the lender agrees to the short sale, the lender may possess the right to issue you a 1099 for the shorted difference, due to a provision in the IRS code about debt forgiveness. Many situations are exempt from debt forgiveness, according to the Mortgage Forgiveness Debt Relief Act of 2007. You should speak to a real estate lawyer and a tax accountant to determine the amount of short sale tax consequences, and whether you can afford to pay those taxes, if any.
  • Blemished Credit Report – A short sale will show up on your credit report. It’s a pre-foreclosure that has been redeemed. Short sales affect credit ratings. While the damage to your credit report may not seem as significantly bad as a foreclosure to you, creditors may not make the distinction. Experts say the drop in your FICO score is identical to a foreclosure reporting.

Short Sale vs. Foreclosure Consequences

Understand the difference in the consequences between a short sale versus a foreclosure.  A comparative chart highlights the differences between Foreclosure versus Short Sale.  The comparative chart allows homeowners to understand their options and related consequences.

Choosing the Right Realtor

Choosing the wrong Realtor to manage your short sale can have disastrous results. As a matter of fact, choosing the wrong Realtor to help you through this financially stressed situation can and will have long term effects. Kyle Harrison and his team of experts understand the importance of staying up-to-date with short sales, the short sale process and the entire real estate industry. Kyle is a Certified Distressed Property Expert® (CDPE) and has been doing short sales for over three years. They have successfully closed over one hundred short sale files to date. Kyle and his team will lead the way, navigating you and your family through what can seem like a daunting process.  Go to the Getting Started page today and take the next step, it will be the best decision you make.