Short Sales in Colorado
When a homeowner does a short sale in Denver, CO or a surrounding area, they sell the property with the approval of their lender. The lender agrees to receive less than full value of the debt, therefore being “shorted”. Many times the lenders’ legal and administrative costs associated with foreclosure and pursuing a deficiency are very high. In most cases a short sale is a more economical option all parties.
Colorado is a recourse state. That means that lenders have a legal right to pursue the balance of the debt from the seller. However, many banks are now waiving the right to pursue a deficiency. If the deficiency is waived, then the lender, by IRS law, must provide the homeowner with a 1099, which shows the forgiven debt as income received.
How Do You Know an Agent Can Handle Your Short Sale?
A Denver Colorado & surrounding area homeowner in financial distress must be diligent in screening agents to do a short sale in the state of Colorado. Short Sales in Colorado are very technical, detailed and time-consuming transactions. You should be reassured that an agent has done many short sales successfully, and what percentage of their short sales closed. An experienced agent with a short sale designation, such as CDPE (Certified Distressed Property Expert) has specific training on handling short sales in Denver, Colorado and surrounding areas.
And in a Colorado short sale, the seller can’t be represented by a relative or someone who has a close business connection. Arms length rules prohibit that, as well as any agreement, which lets the seller stay in the home or rent it back after the sale.
Your Colorado MainStreet Properties team has knowledge and experience in arms-length transactions that meet the guidelines for short sales in the state of Colorado.
Can a Short Sale in Denver or any of the surrounding areas be done without a Realtor?
A short sale in Denver, CO & surrounding areas typically has many steps, plenty of hoops to jump through, and can be a less than fun waiting game. Most banks have their own set of guidelines when it comes to a Colorado short sale, and many have their own set of short sale documents.
The basic things you will have to supply are: what the hardship is and what you’ve done to get around it; financial docs including paystubs, bank statements & taxes and the comparables of what other homes in your area are selling for.
The short sale is the best alternative option to foreclosure if the homeowner’s economic hardship is long-term unemployment, decreased earnings, or drastically reduced property values. As previously mentioned, if you choose to take benefit of a short sale as an option to foreclosure in Colorado, it is vitally important to use a seasoned real estate broker (with short sale expertise),who can handle the complexities of a short sale transaction.
Your Short Sale Team at Colorado MainStreet Properties gives you the services of a knowledgeable and experienced listing agent. An accomplished negotiator handles every aspect of your short sale, from starting the listing to closing the transaction. If there’s a foreclosure sale date pending on your home, the negotiator even works with the bank to get the sale postponed, in order to get your short sale closed.
The seller doesn’t pay the commissions, closing fees, taxes, HOA transfer fees and water bills. Typically the lender pays for these as part of their investment to get your short sale approved and closed.
While it’s not impossible to do your own short sale, without the proper knowledge, you could still end up facing foreclosure. Why risk that?