Many homeowners who are under water have been thinking of short selling their home because they have not been able to negotiate a loan modification with their mortgage lender. If you are one of them, now may be a good time for several reasons.
- Banks are more willing to work with a short sale than they were just a year ago.
- A short sale is less damaging to your credit than a foreclosure.
- Inventory is low, so your property has a better chance of selling as a short sale now than it did last year.
- Although Congress is expected to extend a 2007 law that allows homeowners to avoid paying taxes on forgiven debt for their primary residence, it will expire at the end of this year if Congress does not act.
- It takes a lot longer than a normal sale to complete a short sale. If it is an approved short sale, 2-3 months. If it is not approved, significantly longer.