Short Sale: An Alternative to Foreclosure?
When it is not in your best interest to remain in your home, but you do not want to go through the process of foreclosure, a short sale may be the most viable option. A short sale is the act of selling a property for less than the amount currently owed to the lender. This must be approved by the lender, but if it is, it will help you avoid having a foreclosure on your record.
In Illinois, our attorneys can advise on whether a short sale may be an appropriate option for your situation. If it is, we can work with your lender to obtain approval and to complete the process in a timely and effective manner. If it is not, we will be upfront with you about your options and what to consider when deciding what path to pursue.
Approval of Short Sale by Lender
Typically, in order for a lender to approve a short sale, a homeowner is required to have:
- Brokers' price opinion of the current value of the property
- Financial worksheet and supporting documents from borrower/seller
- Executed contract
- Preliminary Settlement Statement or HUD-1
- Copy of the listing agreement between the homeowner and the broker, if applicable
When considering a short sale, it is important to take into account any potential tax liability or imputed income liability for the difference between the money paid to the lender from the short sale and the amount that was actually owed. Our firm has the experience to assist with your short sale and advise you accordingly on these matters.
It is crucial to realize that proceeding with a short sale or deed in lieu does not pause the foreclosure process. You cannot ignore the foreclosure while pursuing other available options. Even if you are seeking a short sale or deed in lieu, our attorneys can look out for your foreclosure defense interests.