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I currently have a vacant house that is in pre-foreclosure…

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I currently have a vacant...
I currently have a vacant house that is in pre-foreclosure status. I have been working with a realtor to work out a short-sale. I was wondering what the pros and cons are of a short sale, along with if I should pay to utilize a real-estate or tax attorney throughout this process?
Submitted: 8 years ago.Category: Real Estate Law
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6/28/2010
Real Estate Lawyer: WALLSTREETESQ, Lawyer replied 8 years ago
WALLSTREETESQ
Category: Real Estate Law
Satisfied Customers: 17,267
Experience: 10 years, Real Estate litigation, represent the UFT, NYSID, AFL-CIO, PPD Network Attorney
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under federal law, you will not owe any taxes if the home is sold in a short sale, however, if their is a balance the mortgage company can sue you for the remaining balance. If the bank will not agree to waive the balance, I would let it go to foreclosure and you can live in the home for 6 -12 months for free, and then prolong it more by filing a bankruptcy if you wish, then you would not owe any balance.
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Customer reply replied 8 years ago
Besides the large hit to our credit score, it almost sounds like a foreclosure would be the safer option then. Why would I want to risk being sued for the remaining balance by choosing a short-sale, when a foreclosure would prevent this from happening? What are the pros and cons of either option?
Real Estate Lawyer: WALLSTREETESQ, Lawyer replied 8 years ago
a short sale is only good if they waive the balance, it will hurt your credit if you missed mortgage payments, a foreclosure gives you more time, but you will owe money after the sale.
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Customer reply replied 8 years ago
Relist: Incomplete answer.
I'm wondering what the worst case scenarios are with a short-sale and a foreclosure. I currently have a vacant property that is in pre-foreclosure, and I am trying to figure out which of the two is the best option. I cannot afford to have the bank come after me for tens of thousands of dollars later on. I just want to be done with this house.
Real Estate Lawyer: WALLSTREETESQ, Lawyer replied 8 years ago

a short sale worst case scenario is that the bank will sue you for the balance, but the balance should be less than in a foreclosure. The worst case in a foreclosure is that the home is sold for a very low price and you will end up being liable for a significant balance.

 

http://www.foreclosurelaw.org/Colorado_Foreclosure_Law.htm

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