🔺 Be prepared for a long waiting period. Even if you are well organized and have all the paperwork, short sales can be a lengthy process. Waiting for your lender to review the short sale package can take weeks or even months.
🔺 When the bank does respond... It can approve the short sale, make a counteroffer, or reject the short sale. The last two actions can lengthen the process or get you back on track.
🔺 Don't expect a short sale to solve your financial problems. Here are some post-short sale conditions to keep in mind:
❗️ Your lender may ask you to sign a promissory note agreeing to repay the amount of your loan outstanding in the short sale. If you have ongoing financial difficulties and are unable to pay off the balance, talk to your real estate lawyer about your options.
❗️ Any amount of your mortgage loan forgiven by your lender can be considered income and you may have to pay taxes on that amount.
❗️ Having a portion of your debt forgiven may have an adverse effect on your credit score. However, a short sale will generally affect your credit score less severely than a foreclosure or bankruptcy.