Agents, Banks, Lenders all talk about the risks for a Seller if they choose to sale their house short. Yes, there can be tax problems and lien release problems...plus the short sale may never even occur. Yes, a foreclosure is most of the time the better choice for most sellers, most of the time. Yes, most of us, know all of these reasons, and if you don't please refer to the many good sources of information out there on the risks.
What I want to warn Sellers about is the future lawsuit risks. Don't assume because you as a seller did not recieve any money, that you can not be sued later by a buyer. A buyer in most cases has at least one year to sue, and in some cases up to 7 or 10 years depending on the state and situations.
Why would a buyer sue you? Don't they know you were desperate, you didn't net any money at the closing, you are renting now, and your credit is ruined? Yes, they did at the time the property closed. Flash forward a few months and the new owners are not happy about something. Somethingthey think you did to them wrong (country western song potential here).... In their opinion it -Could be they think you did not leave the property in condition, they agreed to buy it in... Could be they think you did not disclose something to them about something....Or any number of reasons.....
At some point a buyer may want to take the seller to small claims court, arbitration, mediation, and/or general court to obtain a judgment against the seller. Once a judgment has been obtain they can collect. So as a seller, you may have to pay when you don't have money.
Remember this little dirty little secret when you consider the pro's and con's of a short sale vs. a foreclosure.
No comments:
Post a Comment