When Does A Short Sale Become Necessary?

When house prices are falling, many properties cannot be sold at a price that allows the seller to pay off the mortgage in full. Under these circumstances, short sales become a popular option.

In a short sale, the lender agrees to accept the sale price, less your closing costs, as payment in full. Napolitano Law PLLC is a residential real estate and business law firm serving clients in the Bronx and throughout New York. Attorney Phil Napolitano assists clients in finding the best solution to meet their needs and help them preserve their financial future. He helps clients ensure that terms of a short sale are advantageous and secured through all documentation.

People and lenders consider short sales for many reasons. If overall debt is so high that there is no way to avoid foreclosure while keeping your home, a short sale may be the best way out of the problem situation. A short sale prevents you from being dragged into foreclosure and further damaging your credit rating. We will discuss the possibility of negotiating a short sale of your home and make sure you completely understand the financial consequences involved. We will take any actions that we can to protect your interests.

What Are The Benefits Of A Short Sale Compared To Foreclosure?

A short sale protects your financial future in ways foreclosure cannot. The differences include: 

• Credit impact: Foreclosure stays on your credit report for seven years and drops your score significantly more than a short sale
• Future housing: A short sale makes it easier to buy another home or rent an apartment within a few years
• Employment opportunities: Some employers check credit reports, and foreclosure creates bigger red flags than short sales 
• Control over timing: You work directly with the lender to find a buyer rather than waiting for the bank to seize your property
• Personal dignity: You leave your home on your terms instead of facing eviction proceedings

Lenders often prefer short sales because they recover more money than through foreclosure proceedings. Attorney Phil Napolitano helps clients present their situation to lenders in ways that increase approval chances while protecting client interests throughout negotiations.

How Long Does A Short Sale Take In New York?

Most short sales in New York take three to six months from start to finish. The timeline depends on how quickly your lender responds and whether you have multiple mortgages on the property. 

The process follows these steps:

• Lender approval: You need permission to list your home as a short sale
• Finding a buyer: You must locate someone willing to wait for the bank approval of their offer
• Bank review: The lender reviews the offer and orders an appraisal of your property
• Final decision: The lender decides whether to accept the sale price as payment in full
• Multiple lien resolution: Each mortgage holder or lien holder must agree to the terms

Working with our attorney can speed up the process. 

Are There Tax Consequences Of A Short Sale?

The IRS may treat forgiven debt as taxable income. If your lender forgives $50,000 of your mortgage, you might owe taxes on that amount as if you earned it.

However, certain protections exist. The Mortgage Forgiveness Debt Relief Act and other provisions may exempt you from this tax burden depending on your circumstances. Your specific situation determines whether you face tax liability.

Do You Need An Attorney For A Short Sale In New York?

New York short sales involve multiple legal documents, lender negotiations and potential disputes. Our lawyer helps ensure paperwork is handled correctly and your interests remain protected when dealing with banks. 

Your Advocate Throughout The Process

The short sale process is complex, and mistakes can be easily made. With the assistance of an experienced residential real estate lawyer, you can make sure the decision you choose is the best in the long term. Bronx short sale attorney Phil Napolitano will help you assess your situation and, if needed, guide you through the short sale, making sure it goes as smoothly as possible.

We have nearly 30 years of experience in real estate law, negotiating transactions and resolving disputes. We have the knowledge and skill necessary to recommend options uniquely tailored to each individual client.

We will help you apply to the bank for a short sale, documenting the hardships that have led you to seek this option. The bank will assess the value of the house and your financial situation in order to decide whether to accept. If you have multiple mortgages or home equity loans, multiple lenders will be involved.

Contact Our Real Estate Firm For Guidance With A Short Sale

If you are looking at negotiating a short sale solution to your mortgage problem in New York City, attorney Phil Napolitano is ready to advise you. With years of experience and many successful outcomes for previous clients, he has the skills necessary to protect you from unexpected negative outcomes.

To discuss your options with a residential real estate lawyer during a free initial consultation, call our office at 718-414-6175 or reach us online through our contact form.

Se habla español. We have a large Spanish-speaking clientele and bilingual staff on hand.