Do you have a rental or investment property that’s lost value rapidly in the last few years without generating sufficient income? Or, do you have a vacation home that you just can’t afford to keep? You may be wondering whether you can short sell this home and get out from under.
The answer is: “maybe”. As with any short sale, it’s up to your lender to determine whether they will accept less than the home is worth. It may still be a good deal for them vs. foreclosure, so don’t think the idea is completely off the table. However, you should be aware that you won’t be getting some of the benefits that are available to owners selling a primary residence:
· You won’t qualify to participate in HAFA (this means you will have no protection against foreclosure while the short sale is being negotiated)
· You likely won’t get a relocation assistance payment from the bank (although the actual resident may if you are selling a rental property)
· You will probably need to negotiate with any secondary lien holders yourself
· You may need to bring cash to the table to close the deal
· You are much less likely to receive debt forgiveness
· If you do have a portion of the debt forgiven, you will probably owe tax on that amount
Your best bet is to find a buyer who is willing to pay a really good price for the home based on its current market value. And you definitely need an experienced short sale specialist who knows how to negotiate a sale on a secondary residence!