Divorce is a complicated process that can put an additional burden on you financially. If you find yourself unable to make mortgage payments for many reasons during or after your divorce, you may need to consider a short sale. Look below to learn the five things you should know about short sales and divorce.
Know Why a Lender Would Accept a Short Sale During Divorce
Divorce can have an immediate impact on your finances, rendering you unable to make mortgage payments. That could lead to foreclosure, but lenders want to avoid that if possible because they may not recoup as much money. As a result, lenders want to keep you in your house by providing payment flexibility or letting you sell it for less than you owe.
Your Divorce Attorney May Offer Options
Before you make any decisions, you should consult with your divorce attorney about your overall case. You may even be able to minimize your mortgage payments without needing to sell. You may also be able to negotiate an extended amount of time to refinance or sell the property with the opposing party.
Both Parties Must Bind to the Short Sale Procedure
Once you have agreed to and secured a short sale, you must bind both parties to the short sale procedure with a Separation Agreement and Property Settlement or with a Partial Property Settlement. A full agreement resolves all of your marriage rights, but a partial agreement will rapidly commit the parties to the short sale if additional time is required to negotiate or contest other claims. The main goal is to bind both parties together so neither can back out or cause a stir when you receive an offer.
The Court May Force a Short Sale
It can be hard to get two parties to agree, especially when strong emotions are at play for both sides. However, keep in mind that a judge can order both sides to complete a short sale when it’s the best available option.
There May Be Additional Considerations to Work On
You'll also need to figure out who will live in the house until you sell it, who will deal with upkeep, who will pay the bills, and other specifics, including the advertising and selling process. In any thorough settlement, you'll also need to handle the repercussions of your short sale. You should consult with your lawyer to determine the appropriate course of action for each of these problems.
Understanding the five things you should know about short sales and divorce can help you focus on your financial future, even during a typically fraught emotional time. The professionals at Short Sale Cooperative understand what a difficult moment this is and can help explain your short sale tax implications along with other valuable information to make the process easier. Feel free to contact us with any questions you may have about our services.