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Hi everyone!

 

Has anybody done a short sale on vacant land?  I have a client that is upside down on a lot they planned on building their dream home on.  They have needed to put these plans on hold due to economic reasons.  Can they do a short sale?  Should they just let it go and walk away?

Your expertise is greatly appreciated.

 

Thank you,

 

James

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The reason for the short sale is to avoid the damage to the credit that a foreclosure can do, and maybe if your client needs has a government job, or would try to get on in the future, that will affect government clearance.

You also have to consider if the loan is some how attached to their current home, like a cross collateral, equity line of credit, heloc etc. where the lender can come and place a lien on their current house, etc.

I have never done a short sale on a lot, but the principle and procedure should be the same, for the banks a lot or a house is just a loan number and possible a toxic asset that they don't want in their inventory.
Jose,

Thank you for the reply. Their current home is not attached. They actually purchased the home after the lot purchase. Lot values have dropped extremely low in my area. They are 30% or less of the peak value of a few years ago.

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