Foreclosures are abundant amongst Miami real estate properties these days. But that is not the only option for all the homeowners who are upside down and can no longer make their mortgage payment (because of a job loss, divorce, or an option ARM that’s resetting higher). Did you know that a foreclosure sticks on your credit record for at least 10 years? Not the best option for you? Now you have a choice- some experts are now promoting a “short sale.”
If your bank agrees to a short sale, the process goes like this: First you hire an agent to find a buyer for the house, you then sell the house for a loss, and with the bank’s blessing, they agree to eat the loss (although they could still demand the homeowner make some kind of payment or share the loss). That’s the short version of how it works.
You’ll probably need to find a Miami real estate agent willing to work for a smaller commission (which makes the bank a little more willing to absorb the loss), and you’ll also need to scale back your own spending. Avoid charging expensive items such as jewelry on your credit card or anything else that will make a bank less likely to do you any favors on the sale of your home. You should also be prepared that if your bank does agree upon a short sale and absorb the loss, the IRS might treat that as taxable income and you might have to cover the taxes on it.
Your best option of course is to avoid the whole situation and find some way to stay in the house. Ask your lender if they are willing to forgo a couple of monthly payments to help you get back on your feet. They will usually agree to this if you are in good standing and a lot of times will defer the payments to the end of the loan. Banks these days are more and more willing to make accommodations to avoid taking the property back.
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