Legal Question in Real Estate Law in Florida
This is regarding an investment property, it�s a boat slip actually. Owe $52k on it. I intended to do a short sale, and I received an offer for $10k this morning, but I started wondering what�s more advantageous for me financially....a short sale or a foreclosure. I understand with a short sale, the only out of pocket expense I have is that I have to pay taxes on the deficiency. What out of pocket expenses are there w/ a foreclosure? Do I have to pay taxes on it? Pay the legal expenses of the lender?
I know that a FC is worse for my credit record than a SS, but is that the only disadvantage?
2 Answers from Attorneys
Many lenders now are refusing to waive their rights to a deficiency judgment in a short sale. You should verify this. In the past, lenders have generally not exercised this right, but that is starting to change.
In foreclosure the lender has a right to determine a deficiency judge against you which is a money judgement .(many lenders are so busy they don't go after people ).In a short sale you can have an income tax liabilility (forgiveness of debt not your principal residence). I have represented clients in these transactions to determine which path best suits a clients situation which involves assessing a lenders action in these type of cases.If you need legal assistance call me or e-mail me to discuss further.
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