Chicago IL Short Sale Attorney
A Chicago real estate attorney knows that a short sale can be very helpful for many clients, but most people are not aware of this option. A short sale will take away your mortgage debt, but it will not allow you to keep your home. There can be some tax complications, but it depends on the amount the house was sold for compared to the outstanding loan balance.
The Process of a Short Sale
It may be better for you to do a short sale on your property than to have a foreclosure on your credit. It’s important for your attorney to work with the real estate agent in order to have the best possible outcome. Most good realtors will be able to explain the process of a short sale as well. Here are a few things that need to occur in a short sale if you are looking for more information.
The First Step in a Short Sale
If you are not working with a real estate agent you will need to make some phone calls to find the person responsible for handling short sales. This person will be able to send you a list of the things you need to determine if you qualify for a short sale. A good realtor will be able to help you through this process so it’s a great idea to have one. Our team can make suggestions for you.
The Second Step in a Short Sale
Most lenders will not release your personal information if they don’t have written permission. If you have an attorney on your team they will send you a letter giving them permission to speak on your behalf. Again it’s a great idea to have someone with experience on your team.
The Third Step in a Short Sale
The third step in the short sale process is submitting your application to the lender so that they can see whether or not they will approve your short sale. They will look at things like your income, your needs, and your property value. The documentation that you or your attorney will need to provide to your lender is listed below.
There are a number of steps in the short sale process and it can be difficult for most people to navigate without legal help. At the law office of Ranj Mohip LLC we are here to help you move through this process. We know how stressful this situation can be and we are here to help you every step of the way.
Please don’t hesitate to call with any questions that you might have about Chicago area short sales. Let us bring our experience to the table.
Tax Consequences of a Short Sale
Many people don’t realize, but you can receive a form 1099-C for the amount of your lenders losses, if you complete a real estate short sale of your home. In the eyes of the IRS this is considered a loan forgiveness.
Many individuals will end up being responsible for taxes on the amount of the 1099-C if they have other assets and they are not insolvent. Depending on your situation, you may be required to report the forgiven debts as income, if your debt was settled with the creditor for less than the full amount owed.
A lender must send you and the IRS a Form 1099-C at the end of the year that the debt was forgiven. You will only receive this form if the lender forgave $600 or more of your debt’s principal. You will be required to report this amount on your tax returns. If for some reason you did not receive this form, ask for it and report it on your tax return. If you don’t report the transaction you could get an audit notice or tax bill.
The only way to avoid theses tax consequences of a short sale is if the debt was discharged in a bankruptcy, you were insolvent before the debt was written off, or the write off of the debt was intended as a gift.
Short Sale Negotiation Companies
Many homeowners have turned to short sales to help resolve their financial situation. A short sale can be a huge relief to a borrower that is in too deep, but there can also be a lot of potential problems that can arise. For many people they are benefited from the partnership of a short sale negotiation company. A short sale negotiation company can help the borrower with research, proper documentation, diligence, and quality communication with the lender. For some people, it is in their best interests to work with a short sale negotiation company, for others a Chicago real estate attorney may be a better choice. To really know which option may be the best for you call us today to learn more.
Short Sale Timeline
A short sale timeline can depend on your loan information. For example, the type of loan you have, which lender you have utilized, and even if there is mortgage insurance on your loan. These conditions can affect the timeline of a short sale.
The following are some of the steps involved in a short sale:
- Gathering the appropriate paperwork
- Appropriate paperwork signed
- Short Sale listed
- 60-90 days to receive an acceptable offer
- Accepted offer signed and received
To recap – its about thirty days to sell, sixty days for the approval, thirty days to close escrow – so about four months on average for a short sale.
There are definitely some things that can cause delays in a short sale timeline. The most common being a buyer that is not committed to the process or even a buyers agent that doesn’t understand the process.
To learn more about short sales, short sale time lines and most importantly how a Chicago real estate attorney can help you – call us today. Our attorneys are very experienced with the short sale process and have been very successful helping people through that process.
Short Sales & Equity Loans
Many borrowers don’t always realize that a foreclosure or a short sale of their home means that their mortgage woes are gone.
Mortgage companies are going after homeowners for a part or all of the difference, if a home is sold for less than the outstanding mortgage. Any unpaid amounts after the conclusion of a foreclosure, can be susceptible to legal action by the mortgage company.
A promissory note is a written promise to pay back a loan or debt, and many mortgage companies are requiring borrowers in a short sale to sign them. Many Chicago real estate attorney’s would agree that they have seen an increase in these types of requests from mortgage companies.
The right of a lender to pursue a former homeowner for unpaid debt is very common in many states. Until recently, many borrowers were able to refinance or sell their homes to pay off their debts. Unfortunatley, the gap between home values and mortgage balances has become so large