Las Vegas Bankruptcy and Short Sale FAQ

For most people, bankruptcy, short sales, and other financial difficulties start with lots of questions.
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Las Vegas Bankruptcy | Do I have a case?

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  • What type, or chapter, of bankruptcy should I file?
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What is a Short Sale? | Las Vegas Short Sale Attorney

Information About Short Sales in Las Vegas, Nevada

A short sale is the term used to describe a real estate sale in which the seller receives less than the amount owed on the mortgage. The bank or other lender agrees to forgive the difference between what is owed and what is realized from the sale. In markets with declining home values, short sales may be the best way for the lender to realize the value in a home. Short sales are also appealing to homeowners seeking to avoid foreclosure after receiving a notice of default.

At our Las Vegas, Nevada, law firm, our attorneys help homeowners protect their interests during the short sale process. We explain the tax implications and talk about potential consequences on future credit scores. Our lawyers can help clients decide whether a short sale is right for them.

Why a Lender Might Approve a Short Sale

Homeowners who sell property for less than its outstanding mortgage must obtain approval from the lender or make up the difference themselves. There are numerous reasons why a bank might approve a short sale. If the homeowner is several payments behind, the lender may see a short sale as a way to get something out of the house. If the home is in an area of steeply declining values, the lender may decide that it is better to get some money now than even less later after foreclosing on the property. Importantly, short sales allow lenders to avoid the costs of the foreclosure process.

Why a Lender Might Reject a Short Sale

Lenders are not always eager to accept short sales in lieu of full payment. Short sales require more paperwork and take more time than conventional home sales. There may be additional loans on the home — frequently the case in difficult economic times — that require permission from multiples lenders, not just the primary mortgage holder. The bank may be facing a big loss on the property because there is little home equity and a steeply declining market. Nevertheless, short sales are generally a better financial result for lenders than foreclosure sales.

 

Nevada Short Sale Attorneys | How does a Short Sale Work?

A short sale is a real estate transaction in which the property is sold for less than what is owed to the lender or bank. Whether or not the lender approves the sale depends on several factors, including the borrower’s home equity, the condition of the local real estate market and whether the lender believes it could recoup more with a foreclosure after a mortgage default.

Short Sale Process

At The Schwartz Law Firm in Las Vegas, our attorneys advise clients about the benefits and disadvantages of a short sale. We also help them understand the process, which includes:

  • Listing the home with a broker: Attorney Samuel A. Schwartz also owns a real estate brokerage and can list and show short sale properties.
  • Proposing the sale to the lender: After receiving a formal offer that appears reasonable in light of the comparable sales in the market, the seller must propose the short sale to the lender.
  • Drafting the hardship letter: The lender will usually require a hardship letter that describes why a short sale is necessary. The lender may need to review other documentation of hardship, such as pay stubs and bank statements. The lender will also require a signed purchase agreement from the proposed buyer.
  • Obtaining an appraisal: The lender will typically do its own evaluation of the property’s value to ensure that approval or denial of a short sale is based on a professional assessment of the market value of the property.
  • Reviewing the proposal: There are numerous reasons a lender may not approve a short sale. Our lawyers can advise clients about the probability of a successful short sale.
  • Approving the sale: This may take as long as six months, depending on the lender and market conditions.

Our lawyers can explain the details and help clients obtain and submit the documents required by lenders to approve short sales. In addition, as a real estate broker Samuel A. Schwartz can handle all details of the listing and sale.