re you “upside down” with
your real estate If you are using the services of
investment? Or to put it a real estate broker, the broker
another way, are the outstanding will provide an estimate of
loans on your property greater closing costs. If you are selling
than what you could get if you the property on your own (for
sold the house or property in sale by owner), call a local
today’s real estate market? If title company or real estate
you are in such a situation it is attorney and ask, as a seller,
possible to make a “short sale” what the closing costs will be.
and cut your loses before they
grow bigger. Here is a 3. Determine the amount owed
step-by-step guide to making a against the property
successful short sale on your
real estate: This will be the total of all
loans against the property.
1. Verify the value of your
property 4. Do the calculations
If you are selling the property Subtract the total amount owing
through a real estate broker, against the property from the
your broker will provide you with estimated proceeds of the sale.
an estimate of market value. If On a short sale, this will be a
you are selling the property negative number.
yourself, do your own market
analysis of the area and your 5. Contact the lender or lenders
property.
Talk to someone in the customer
2. Add up all the costs of service department and tell them
selling the property the situation. They may direct
you to a specific department. county), attorney fees, a portion
Talk to a supervisor or manager of unpaid property taxes,
if possible; this person will re-conveyance fees, notary fees,
have more authority. delivery fees, documentary fees
and/or transfer fees.
6. Ask the lender what its
procedures are for a short sale If you sell the property without
the assistance of a real estate
Some lenders are willing to work broker, you will save the amount
with you by reducing the amount of the commission and have more
owed or making other to apply toward paying off your
arrangements. Others will look to loan.
the agents involved (if any) or
anyone else who's making money If you feel more secure having a
from the transaction to see if real estate broker handle the
they are willing to make transaction, consider using a
concessions to make the discount broker to market your
transaction happen. Still other property. You could also try to
lenders will tell you that your negotiate the sales commission
debt is your responsibility, one with your broker.
way or the other.
Remember that the amount on your
7. Sell the property monthly loan statement does not
include interest. Interest is
Tips & Warnings accrued until the date a loan is
paid off, so you may have as much
Closing costs will include title as 30 days of interest on top of
and escrow fees (if the seller is the balance owing, and you'll
responsible for any portion of need to include this interest in
them, which will depend on your the total payoff amount.
are seen as a relief of debt and
And, two more important points: may be treated as income. Check
with your accountant.
1. If a property is sold under a
short sale, the lender may Follow this step-by-step guide
require the buyer to make up the and you will be able to make a
difference, either through a successful short sale on your
personal obligation or a real estate. If you need help,
collection. then contact a capable broker or
real estate agent.
2. The IRS often gets involved
with short sales, because they
About the Author:
Izzy Buholzer is a Miami Real Estate agent specializing in residential, business and investment real estate in South Florida. You can learn more about investment and business real estate at his website: http://www.ibmiami.com and if you are looking for a home in sunny Florida then visit the http://www.ibmiami.com website today and get the best deals in Florida residential real estate.
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Izzy Buholzer
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