If I Apply for a Short Sale, Do I Have to Pay My Property Insurance?
During the housing boom,
many lenders did not require tax and insurance impounds. As a result, it is not uncommon for a short sale seller in financial distress to have unpaid property taxes, insurance and HOA dues. However, in the case of taxes and HOA dues, it is not preferable and can make the short sale more difficult. I am often also asked by short sale sellers whether they can skip paying their insurance premiums.
My general response is – what happens if the house burns down? Does not having insurance make your situation better or worse? My point is that your interest in insuring the home remains the same during a short sale as it was before the short sale. It is still an asset — even if it is currently an asset without equity. Often people don’t want to put another dollar toward a home they are about to short sale. However, in this case, I don’t think the money saved justifies the risk.
If you are considering a short sale of your Santa Maria CA, Orcutt CA, or Nipomo CA home, you should seek out an experienced short sale agent to guide you through this process. There are many pitfalls that can be avoided with the right upfront advice. If you would like a short sale consultation, please call my office to schedule a meeting or a telephone consultation at (805) 938-9950.
Tni LeBlanc is an independent Real Estate Broker, Attorney, and Central Coast Short Sale Agent serving the Santa Maria, Orcutt and Five Cities area of California.
*Nothing in this article is intended to solicit listings currently under contract with another broker. This article offers no legal or tax advice. Those considering a short sale are advised to consult with their own attorney for legal advice, and their tax professional for tax advice prior to entering into a short sale listing agreement. Not affiliated with the government or your lender. A lender may refuse to change a loan.
Copyright © 2011 Tni LeBlanc * If I Apply for a Short Sale, Do I Have to Pay My Property Insurance?*