Negotiate to stay in the property until it is sold and closes escrow
Negotiate to stop making payments due on your loan
Negotiate to lower your loan balance to allow for a quick sale
Negotiate to allow your lender to pay all sales commissions
Negotiate to avoid a foreclosure on your credit or a deficiency judgment
Negotiate to take advantage of Debt Relief Act of 2007 which removes the IRS tax consequences for many sellers Nationwide.
In California, Click Here for the State of California Franchise Tax Board website and look for the link to Publication 1016 regarding withholding, pay attention to Loss or Zero Gain sales on page 8. Consult with your Tax Preparer regarding this. In California, well over 60% of all conventional loan workouts are done through the short payoff method.
What you need to know about Short Sales
A short payoff sale, commonly shortened to Short Sale, is generally defined by loan loss mitigation professionals as "A sale in which a lender allows the property securing a mortgage or deed of trust loan to be sold for less than the existing loan balance, due to factors such as the borrower's financial circumstances, the property's physical condition, and local real estate market conditions."
A "short payoff sale" occurs when your lender agrees to accept less than the total owed in exchange for a release of the mortgage as a lien on the property. Other terms for a short payoff include short sale, pre-foreclosure sale, or pre-sale.
You must apply for a short payoff if the sale of your house will not leave enough money to pay off all the mortgages, liens, back payments, and sales commissions on your property. If you believe you may owe more on your home than fill out the application below for a free consultation to see if a short sale is the right option for you.