Deficiency judgments are a common thing when short selling your home; that’s why it’s important you contact a Denver short sale expert with all of your questions about them. A deficiency judgment is basically the difference between what your owe on your home what it is sold for in a short sale. If you owe $100,000 on your home and you short sale it for $75,000 the difference is obviously $25,000. In the future, it’s possible that your lender could try to collect on that difference, hence the importance of selecting a realtor that is a short sale expert to ensure this doesn’t happen.

When short selling your home there could be two possible outcomes to how the short sale is settled with the bank. Once a short sale is closed, the homeowner will receive an approval letter from the bank saying one of two things. If the approval letter states that the lender will not pursue deficiency, this means that the bank will not try to collect on the forgiven amount in the future.

Sometimes, however, certain financial institutions and lenders have procedures that keep them from completely waiving forgiven debt and fully releasing a homeowner from being liable for that debt. This means that, if they chose to, they could contact the homeowner in the future looking to collect on the forgiven amount.

To ensure that the forgiven amount on your short sale is completely forgiven and all deficiency judgments are waived, work with a realtor that is a short sale expert. There could be a negative impact on your current financial situation and on your financial future if you hire someone that is not experienced in short sales. By hiring a short sale expert in the Denver area you can be assured that your financial troubles stay in the past and don’t come back to haunt you.