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A “Short Sale” is the sale of a property at a price below the encumbrances (e.g., loans) recorded against the property. As an example, if one owes $500,000 on a home that sells for $450,000, the transaction is a short sale.
A short sale requires the consent of each lender who’s interest is compromised by the sale. Generally, the more loans in the mix, the more difficult it will generally be to complete the sale. Moreover, a lender’s consent to a short sale does not necessarily mean that the lender will forgive the debt. It is common for a seller of a home in a short sale transaction to be contacted by a former junior lien holder asking for payment on the loan post – sale. Moreover, many short sales result in taxable income to the seller, especially if the property sold was an investment property or second home.
Before you decide to short sell you should consult an experienced attorney. David Speckman is a CPA, real estate broker and has practiced real estate law for nearly two decades. Mr. Speckman has the knowledge and expertise to advise you of the pros and cons of a short sale transaction and to provide assistance at all levels of the transaction. Call today to schedule a confidential consultation with Attorney David Speckman.