Short Sales in Atlanta
In the greater Atlanta area, there are fewer homes in distress, 400+ today, than when we wrote Avoid Atlanta Foreclosure with more than 2,000 houses, meaning fewer foreclosures and short sales, but with markets in turmoil, who knows what the future will bring. In the housing crisis of 2008, a short sale in Atlanta was a way to move on from a bad investment.
A short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold. In a short sale, the bank or mortgage lender must agree. Usually, a short sale is the result of economic or financial hardship.
Like Atlanta, distressed home sales in the U.S., which include REOs and short sales, are still a part of the real estate housing mix. They accounted for 11.2 percent of total home sales nationally in January 2016, down 3.3 percentage points from January 2015 and up 0.6 percentage points from December 2015.
With that in mind, let’s take a look a short sales in Atlanta and see what you should know.
A Short Sale Won’t Save Your Credit Score
NOLO says saving your credit score may be the most touted reason for choosing to short sale your home rather than letting it be sold at a foreclosure sale, however according to myFICO, short sales, foreclosures, and deeds-in-lieu of foreclosure are all “not paid as agreed” accounts and are considered the same for purposes of your FICO score.
Short Sales Don’t Always Cancel the Remaining Debt on the Mortgage
When a lender approves a short sale, what is the lender agreeing to do? At the very least, the lender is agreeing to remove or release the lien on the property. A seller would have a near impossible task in selling a property without this lien release.
Is the lender also agreeing to cancel the seller’s obligation to repay the loan in full? Not necessarily. Some lenders ask sellers to sign new, unsecured promissory notes before approving the short sale. Other lenders, without asking for new promissory notes, reserve their right to collect the deficiency — the remaining balance of the debt.
You May Owe Taxes on the Deficiency
If your lender forgives you for a deficiency after a short sale, you may owe taxes on the forgiven amount. That’s because it’s considered income by the IRS, upon which you may owe federal and state income tax. Under the federal Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude from your income all or a portion of the amount of forgiven debt in a short sale.
Hire an Attorney to review all documents
Since short sales in Atlanta are complicated transactions it is recommended that you hire an attorney to review the documents. Release of lien and protection from tax deficiency are very important to your financial welfare.
If you have fallen behind on payments, please reach out to us. Whether we buy your house or not we can at least point you in the right direction. Keep in mind that your options are better if you act in the first three months after your first missed mortgage payment.
At Val Buys Houses LLC, we specialize in helping homeowners out of just about any situation, no matter what! There are no fees, upfront costs, commissions, or anything else. Just the simple honest truth about your home. We buy for cash, therefore we can help you sell it fast to resolve any situation, or give you as much time as you need.
We care about our community in Cobb county and Atlanta. At Val Buys Houses LLC we take a lot of pride in providing excellent customer service. We have come across all scenarios, we are not here to judge; only to help.
Give us a call today at 404-844-8845 and let us see if we can help YOU!