The 5 Pervasive Short Sale Myths that confuse potential short sale buyers and sellers.

Short Sale Myth #1

"Some sellers consider just giving the keys back to the bank or walking away because a short sale ruins their future credit."

False. A short sale is much better from a future credit worthiness perspective. Sellers don't know that doing a short sale helps them preserve their credit and that they can be eligible for a home mortgage again in as little as 24 months.

Short Sale Myth #2

"A short sale does not eliminate the debt of the mortgage."

False. By working with the bank on a short sale, most sellers can typically totally eliminate all of the debt of their mortgage. There are two types of short sales, the kind where the bank agrees to release just the lien and the kind where the bank releases the lien and the debt. Most of the short sales Scott handles eliminate the debt as well as the lien.

Short Sale Myth #3

"Tax liability is huge on a short sale of a home."

False. According to the the Mortgage Debt Forgiveness Act of 2007, if the home they short sell was their primary residence, they will usually have NO tax liability on the sale. Even if the home was an investment property, their tax liability may be very, very little. This act was extended by Congress through the end of 2013. Please consult your tax preparer or CPA for more detailed information on the tax implications of a short sale.

Short Sale Myth #4

"The short sales process takes too long."

False. It can be a bit unpredictable, but most of our short sales are done in less than 3 months. Most of the delays associated with short sales, and the horror stories about them taking 9 months, are a result of an inexperienced agent. With Scott's experience and knowledge of what clearly needs to be done, it is much easier to have accountability and predictability with the short sale process.

Short Sale Myth #5

"Modification is a better option that short sale."

False. Many sellers think that they have to pursue a modification before beginning a short sale or think that a modification is a much better option than a short sale. In most cases, I totally disagree simply because banks are not really in the business of modifying loans to the point where it really is favorable to the seller. Not only that, but upwards of 60% of modification attempts fail, which leaves the homeowner months behind on their mortgage, having missed months of marketing opportunity and the bank is still coming after the house via foreclosure.