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A short sale is defined as a sales transaction in which the seller's mortgage lender agrees to accept a payoff of less than the balance due on the loan. It's an effective approach for parties who are 'upside down' or 'underwater' on the market value of their home and need to sell.

A sandwich is defined as two or more slices of bread or the like with a layer of meat, fish, cheese, etc. between each pair. 

Fans of vintage comics know that definition doesn't begin to compare to the gastronomic innovations created by Dagwood Bumstead, and I'm here to tell you that the short sale definition barely scratches the surface.

Let me give you a brief overview: the seller in a short sale situation is motivated.  A completed transaction won't resolve all his or her financial issues, but it's a major step in the right direction.  The buyer is hoping to get a great deal on the property, and is in a good position to do so.  In a traditional transaction, this would be a slam dunk-everyone is motivated, the paperwork is staggering but manageable, we're on our way to the settlement table! But wait, there's a third party involved, the current mortgage lender.

The lender has to approve the sale price, terms and conditions.  The lender has folder after folder of similar transactions at various stages of review and approval.  The lender is not bound by the "time is of the essence" rule.  The parties to the transaction must be prepared for the simple fact that lender approval is a longer process than a traditional transaction, they need to know that there will be requests for various forms of documentation that may exceed what's normally asked for.  This is not a critique of lenders, many are swamped and they are working on streamlining, but the extra steps are going to take time, and the parties to the transaction need to be aware.

The Realtor representing the seller needs to have a strong understanding of the ins and outs of this process. His or her most important role, once the transaction is in process, is to establish a relationship with the person handling the transaction for the lender, to supply all documentation needed in a timely manner and to follow up, follow up, follow up. Experience with short sales is imperative. In real estate, listing a house is pretty easy, taking it to settlement, especially in a short sale situation, is what separates a PB&J from a Dagwood special.  I love the challenge of these transactions!

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There's nothing quite like a home that you can truly call your own. A place where you can have the gleaming hardwood floors you've always dreamed of, a space to cultivate your own vine-lined patio, a way to provide a good neighborhood for your kids to grow up in, and a freedom from the whims of your landlord. These are the images that immediately come to mind, for many of us.

Yet some of the biggest advantages of owning a home are less romantic and more practical – in fact, there are financial advantages to owning a home:

• Tax Deductibility You can deduct the cost of your mortgage loan interest from your state and federal income taxes. Since interest generally will account for most of your payment during the first half of your mortgage, the savings can be significant. Some of your costs at the time of closing (including prepaid mortgage interest) can be taken as deductions on that year's income tax return, and points paid up front at the time of closing represent additional mortgage interest and may be taken as a deduction.
• Tax Deductibility of Property Taxes You can deduct all of the property taxes you pay.
• Appreciation Potential Real estate is considered a good long-term investment because it usually appreciates in value. The effects of borrowing potential can increase as the value of the home appreciates.
• Capital Gains Exclusion When it's time to sell your home the amount of capital gains you have to pay is reduced. A homeowner can exclude up to $500,000 per couple if married and filing jointly, or $250,000 if single or filing separately for homes that have been the taxpayer's principal residence for the previous two years.
• Capital Gain Treatment Congress allows preferential tax treatment on gains from capital assets held for more than one year. This would be important for a homeowner who has gains in excess of the allowable exclusion.
• Principal Accumulation Mortgages are designed to pay the interest for the time that the money has been used, as well as to retire the principal debt over a period of time. This payment plan means that part of the payment each month is for principal accumulation.
• Personal Enjoyment Pride of ownership is a valid reason for wanting to own a home. You can personalize your home while enjoying the financial benefits.

For the best evaluation of your financial situation, consult your financial advisor. He/she will be the most qualified to discuss the financial consequences of a home purchase decision, as well as help you to establish a plan that will achieve your home ownership goals.

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