Can I move out of my home while pursuing a short sale?

UPDATED: Aug 22, 2011

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Can I move out of my home while pursuing a short sale?

After being denied restructuring of our loan 4 times, we are pursuing a short sale. I am afraid that if we remain in the condo through this whole process, we may have trouble finding a suitable rental before the sale-especially if the transaction shows up on our credit report. Do we need to remain in the property or can we start looking for a rental now?

Asked on August 22, 2011 Oregon


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you have the home listed for sale with a real estate brokerage firm and are being represented by a real estate agent with the intention of selling your condominium as a "short sale," there is no reason why you need to remain in your property as an occupant.

If you are not living in the property, it may be easier for your real estate agent to "stage" it for sale.

You need to be aware that if the lending institution holding the loan on your property refuses to sign a short sale addendum approving the purchase amount lower than the amount owed on your home, then you will not be able to conclude any desired short sale.

Another issue that you need to be aware of is possible tax ramifications on a short sale to you for "forgiveness of debt" on the amount owed on your mortgage which is a taxable event.

Good luck.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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