This week we've been having a discussion based on Keeping Current Matters' discussion of short sales and a lot of the myths surrounding them. Gil and I are committed to helping our friends and neighbors understand the many differences between a short sale and a foreclosure.
We began with a definition of a “short sale;” in the simplest of terms, it's when the bank that holds your mortgage agrees to accept less than the amount you owe on the property, in order to avoid foreclosing on it. We noted that you have to qualify for a short sale, which essentially means that (1) you can prove you've suffered a true financial hardship that's keeping you from making the same income you had when the loan originated and (2) your house is worth less than you owe on it.
We've been throwing out some of the common myths that people hold about short sales. Check out our two previous blog entries to get the full scoop on those we've already demystified. Today, we're going to close things out with some final factual differences between the two possible outcomes (short sale or foreclosure).
A lot of folks believe that banks don't want to do short sales, or that it's just too hard to qualify for one. Trust us on this one – your bank would rather perform a short sale than a foreclosure any day of the week. Foreclosures are HUGE drains of time and money for the banks, especially since they're already overloaded with foreclosure properties and are not looking to add more. And getting qualified for a short sale is easier than you think. Banks and consumers both have government incentives to go the short sale route.
Don't believe that the short sale process is “too hard” or that you're “sure to be denied.” Neither of these speculations is true! Yes, a short sale is time-consuming. And if you don't have your documentation lined up exactly the way they need to be, you can be denied. Experienced agents (like Gil and I) have the specialized skills and the experience to help ensure that this will NOT happen to you.
Finally, too many people believe that a short sale will cost too much out of pocket to undertake. The fact is, you shouldn't have to pay anything out of pocket; you could, in fact, get money back from the transaction! Most short sale programs have some type of financial incentive for the home owner. As a seller, you shouldn't ever have to pay for any short sale cost upfront to any professional service. Realtors charge a commission that is paid for by the bank. The only potential cost to you is if the bank doesn't release you from a deficiency balance in the short sale, and that's becoming a rarity.
We hope that we've answered many of your questions – and put your concerns to rest – about the differences between short sales and foreclosures. Leave your thoughts below; we'd love to hear them!
The Marchany Team KNOWS central New Jersey. We're right where you are, whether you're in South Brunswick or Monroe (Middlesex County). If you're looking for a terrific new home in Mercer County, we're prepared to search for your place in the sun in Princeton Junction, East Windsor, West Windsor, and Robbinsville. And if you're ready to put your Franklin Park or Hillsborough (Somerset County) home on the market, we're prepared to find the buyers who are looking for your home. Call The Marchany Team today at (732) 997-0019, and don't forget to “Like” us on Facebook! We are dedicated to helping you in every way possible.
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