Foreclosure Help - Is A Short Sale The Right Choice?

Do you think that your home is worth less than what you owe on it

? Well, then your options are indeed limited. You can either go to foreclosure or you can seek out the right "Foreclosure Help". A short sale is one of the most effective solutions, this basically means that you will be selling your house for an amount that is lower than what you owe on it. So, at the time of the closing the amount that the lender will get will be lower than the balance amount that you owe on the house.

Very few real estate investors and agents understand a short sale enough to complete it successfully. So, if you think a short sale might be the only solution for your troubling home situation, make sure you pick the right Foreclosure Help expert. These real estate experts will in turn persuade the bank to accept an amount that is lesser than what you owe the house. Even banks and lending institutions prefer short sale since foreclosure will turn into a costly affair for them.

The Debt Relief Act of 2007 signed by George W. Bush has made short sale much more attractive for homeowners in trouble. Before 2007, you had to pay tax on the difference between the amount that you owed the bank and the amount that you received from a short sale. But now this difference is not taxed.

Look at this example. If you owe the bank around $125,000 and you short sale the house at $75,000, the bank is receiving $50,000 less than what they would have received if you had continued with your mortgage payments. So, they would send a 1099 form to the IRS for this amount and the next year you would have had to pay income tax on the difference of $50,000. So, you pay around fourteen thousand dollars as tax which is not something that a homeowner would like to do.

However, now, you don't have to pay taxes on this difference. So, if you need to short sale your house to avoid foreclosure, you don't have to worry about paying taxes anymore!

So, your home has been financed by the bank and you haven't been able to pay your mortgage payments for the last few months. Nothing to worry about, just pick a reputable real estate investor who specializes in foreclosure help. In no time, they will be able to do a short sale on your house.

A good real estate investor will handle everything. From paperwork to negotiating with the bank to buying the house himself, they will do all the heavy lifting for you. And you will breathe a sigh of relief that you are finally out of debt. What's more, remember, you don't have to pay any taxes also!

by: Edgar G Martinez

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