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Saturday, October 08, 2011

Short Sale Question – Can my parents buy my house as a short sale?

Short sales are a mechanism by way home owners facing a legitimate hardship are able to avoid foreclosure and get out of a mortgage they can’t afford.

The process can be long and stressful.

Because of the time it often takes to get through the process, depending on the lender, a seller may go through several buyers before an decision from the lender ever comes!

There is no guarantee of lender approval of a short sale.

***If a short sale is the only option to prevent a foreclosure it is worth the effort.

The answer to the question in the title is contained in the following sentence.
A key requirement of a short sale is it is an arm’s length transaction
If two strangers (or non-related, non-business associates) are involved in the sale and purchase of a house, it is probable the agreed upon price will be somewhere close to market value although there is some discounting that always seems to be present in the short sales I have seen in Brevard County, Florida.

The lenders are always on the lookout for fraudulent short sale transactions.  Real estate agents involved in short sales (buyer and seller representatives) also sign short sale affidavits attesting to the arm's length nature of a short sale transaction.   Notice I said "also" as buyers and sellers sign the same declaration.

Short sales present buyers a great opportunity to purchase a distressed property at a discounted price.

The Short sale process allows a seller the chance to remedy a financial burden.  An attempt to "beat the system" has the potential for big legal troubles for all concerned.

If you are in Brevard County, Florida and are facing foreclosure, perhaps a short sale is an option.  Give me a call at 321-693-3850 or email me.

*** I am not an attorney or tax adviserLegal and tax questions should be directed to the appropriate licensed professional.

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