4: Short Sale Savings

Top 12 Real Estate Secrets

That Will
Save You Most Money

Score You Biggest Gains

Secret #4:
Short Sale Savings:

If your property is “upside-down” which means you owe more debt on your home than your home is currently worth and you have a “hardship”, you should consider a “Short Sale”.  Short sale advantages:

(1)   You Get Rid of an Under-Water House and Get Rid of Your Crippling Mortgage Debt: Even if you have multiple mortgages on your home, a successful short sale in California allows you to sell your home and the remaining mortgage debt is wiped out.  In contrast, a foreclosure may still leave you personally liable for a large portion of the mortgage debt on a recourse loan even after the foreclosure is completed.  Because a successful California short sale gets rid of the entire mortgage debt, it is always a prudent option to explore before letting your home go to foreclosure. 

(2)  Your Relocation Allowance could be Substantial: Mortgage servicers now offer  financial incentives in the form of Relocation Assistance to home owners who opt to short sell their homes.  Typical relocation assistance can range from $2500 to $45,000. Mortgage servicers are able to offer these substantial relocation allowances to home-owners because mortgage servicers net 25% less proceeds in a foreclosure than in a short sale.

(3) You can Avoid Property Tax and Routine Maintenance Expenses:  By short selling your under-water home, you can avoid paying property tax and routine maintenance expenses, such as gardener, utilities, repairs, as soon as the home is sold.

(4)  You Enjoy a Dignified Exit instead of an Oppressive Foreclosure

: Unlike a foreclosure, a short sale allows you to hire a real estate professional of your choice who lists and markets your home for sale and negotiates the short sale with your mortgage servicer.  You control the transaction and the public information disseminated about the sale of your home because the real estate professional works for you.  In contrast, a foreclosure can be very traumatic and oppressive.  In a foreclosure, your default is publicly recorded via a Notice of Default and the foreclosure sale is also publicized via a Notice of Sale.  A very public notice is posted on your front door stating that you are in default on your mortgage and this can be read by your neighbors right before your home is auctioned off publicly.  When going through financial distress, it is definitely beneficial to explore a private and dignified short sale before letting the house go to public foreclosure. 

(5)  You Enjoy Shorter Credit Repair and You Can Buy Your Next Home Faster:  When you sell your home in a short sale, it usually takes an average of 2 years to rehabilitate your credit and be in a position to get a new mortgage loan to buy your next home.  However, if your home is foreclosed, it could take anywhere from 4 to 7 years before you can get a new mortgage to buy a new home.  The impact of a short sale on your credit report rating is much less devastating than a foreclosure.  The missed payments leading up to a short sale may cost you about 50 points in your credit rating; while a foreclosure could cost you over 300 points and the foreclosure will remain on your credit report for 7 or more years.

In sum, if your home is upside-down, and you are experiencing some financial distress and you need relief from the mortgage debt, a short sale allows you to sell your home, get rid of the mortgage debt and deficiency, maybe even score some Relocation Assistance from $2500 to $45,000, and enjoy the “New Beginning” that you so rightly deserve.

If you are interested in selling your home, contact Bandele Oguntomilade at 818-825-6996.   Bandele Oguntomilade is a Short Sale and Foreclosure Resource Specialist, a Certified Residential Specialist and the Broker and Owner of Bogun Realty and Luxury Homes in Woodland Hills, California.  You may visit us at http://www.BogunRealtyAndLuxuryHomes.com.