You Want to Sell Short? Really!?!

When we discussed how we could lease the property and how he could earn a positive cash flow, he was immediately sold. So just what was it that he would have given up had he gone with the short-sale?

1. His credit rating would have been destroyed for at least 3 years. (Currently, HUD allows home-loan borrowers to qualify after 3 years from the closing on a short-sale.)
2. He would have lost the tax benefits of holding investment real estate in his portfolio.
3. He would have forsaken the likelihood of property value appreciation in the out-years.
4. He would have lost the positive effect of loan amortization which would increase his equity in the property.
5. He may be strapped with a default judgment that would hang over his head for many years.
6. If the short-sale was ultimately disapproved (about an 80% probability), the property would have been foreclosed on. (His credit rating would suffer equally under foreclosure as in a short sale, but the negative affect would have just lasted longer.)

Essential to the above solution is for a homeowner to get help before letting the house payments go into arrears. Once the homeowner starts getting buried beneath the debt, it is very difficult to get out from underneath. Sometimes, selling short is unavoidable though, and that will be the subject my next blog.

Please give 3 Options Realty a call and schedule professional property managers in Roswell, GA.

Daniel R. Wilhelm
Managing Broker
3 Options Realty, LLC.
http://www.3optionsrealty.com
678-397-1282