Short Sales and investment properties

Posted By Marshall Walker @ Jan 27th 2009 7:35am In: Short Sales and Foreclosures

Shorts and Investments

In the past few days I have received call after call from homeowners who have decided that they just dont like that investment property any more......It may not have increased in value or it may have had terrible tenants that have left it in a mess....there are many reasons to hate an investment property nowadays! The most important distintion here is that IT IS NOT a PRIMARY residence - Most agent s will agree that banks will not accept a deficiency on an invest,ment property ~ WHAT! ~ thats right! Banks typically WILL NOT accept a short on investment properties ~ HOLD ON THOUGH ~ that may be a myth ~ we have a client who is set to close on the 30th of Jan whose lender is accepting a short on the payoff WITHOUT a deficiency judgement or promisary!


Some questions that I always ask of someone who asks about selling their investment property short -

  • Have you spoken to an attorney and your tax advisor? There may be some serious effects from a short sale on your credit and tax positions!!
  • Do you have a second lien holder?
  • Are you current in your payments?
  • What is your credit score?
  • Is the second lien holder the same as the first?
  • Why dont you like this property any more? This one gets some pretty interesting answers!
  • How long do you think it will take to regain your value if you keep this property?
  • How much? Yes, How much do you think you are going to be short AND how much do you have in hand to pay the deficiency?
  • Are your prepared to sign a promisary if required?
  • Why do you think your lender will even consider taking a short?



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