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

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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

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 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.


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