How much will a short sale affect my credit?
The term “short sale” does not appear in a credit report. When you negotiate a short sale, the lender is agreeing to accept less than the full amount owed on the mortgage, and will likely report the account as settled for less than the full balance. With time, the negative impact on your credit scores will decrease.
Does short selling a house hurt your credit?
According to the three nationwide credit bureaus (Equifax, Experian and TransUnion), a short sale may show up on your credit reports as “not paid as agreed,” which means the lender received less than the full loan amount originally agreed upon.
Does a short sale negatively affect your credit?
A short sale can hurt your credit scores because you’re settling your mortgage loan for less than you owe rather than repaying the full amount as agreed.
Will I owe taxes on a short sale?
Similar to a foreclosure, any debt that your mortgage lender cancels because of a short sale is taxable only if the terms of your mortgage hold you personally liable for the full amount of the loan. Regardless of the tax consequences, your lender will report the debt cancellation on a 1099-C form.
Who pays back taxes on a short sale?
In the average short-sale situation, what happens is that the seller’s bank(s) has to direct some of the proceeds of the sale to covering any back taxes on the property, agent commissions, transfer taxes and such before they can apply the rest of the sale price to cover the outstanding mortgage balance(s).
How long does it take for a short sale to close?
How long does a short sale take? One California-based agent has estimated it takes about 60 to 90 days on average for a lender to approve a short sale deal — and that’s after receiving the full offer. However, that’s just one agent’s estimate.
How much less can you offer on a short sale?
This is something that the buyer should discuss with their real estate agent. It’s best to strike a balance between what’s a good deal for you and what’s reasonable for the lender. A price that’s 5% to 10% below market value is typically a good number to put on the table.