It’s happened to thousands of others – but now it’s you.  Your home.  What do you do?

Leslie has written several short newsletters – The Tough Decisions – for homeowners in the beginning stages of foreclosure.  However, they provide wisdom and advice for those in the last, crucial stage of foreclosure as well – when the auction date’s been set for the sale of your home.

The Tough Decisions in a nutshell…

First – deal with your emotions, quickly!  You’re stressed but you have only about 3+ weeks before the sale.  This newsletter discusses the 5 stages of grief many homeowners must process.

Next – “vapor equity”.  Make a wise business decision about the financial debt/value ratio of your home.  “Vapor” equity is paying on the $100,000 – $250,000 negative or “under water” equity in your home.  It means paying a lot of money over many years just to climb out of the hole – just to get back to zero.  Nobody wants to move.  But understand – with either a short sale or foreclosure, you will ultimately have to move.

Foreclosure vs. short sale – which is better?

Foreclosure vs. short sale – are you taxed?  Be advised, you will receive a 1099-C from your lender for any cancellation of debt – the same as income – whether through foreclosure or a short sale.  You must seek tax counsel as Realtors are not qualified to provide legal or tax advice.

If you decide a short sale is in your best interest:

1.  Decide quickly!  There is no longer time for reflection.  Now you’re sprinting to beat the sale date.

2.  Your lender will require you to list your home with a Realtor and submit an acceptable offer from a qualified buyer.

3.  There is no guarantee at this stage your lender will agree to accept an offer – or to postpone the sale date.

4.  Your lender may not agree to a HAFA (US Treasury) short sale.  It may be a traditional short sale.

5.  The key is to move quickly, plead for a one month extension of sale to get an acceptable offer, and then get your lender to approve that offer.

When all options have been exhausted – choose a short sale!  We have stopped sales and provided a “graceful exit” for many homeowners facing an  imminent sale date.  But don’t delay – every day now is important!