In this turbulent economic market, many people have heard of “Short Sales” inDelaware real estate. However, it is often a misunderstood and emotional subject for most home sellers having difficulty meeting the market price in order to sell their home. A short sale is the sale of an asset for less than the loan balance. In the real estate world, this would be a situation where the bank accepts a contract on a property for less than the mortgage amount owed. In most cases home sellers that proceed with a Short Sale to sell their property are experiencing one of the following situations. They are facing default orcurrently in default on their mortgage. They are in foreclosure proceedings with their mortgage provider. Or, they simply want to sell their property, but they owe more than the value in today’s market (upside down on Mortgage).
People facing these situations experience a great deal of anxiety, , but there can be great benefits to going through a short sale. If a Delaware home seller is over extended and facingBankruptcy, Deed in Lieu, or Foreclosure then a
short sale is an attractive alternative. While there may be a negative impact from a Short Sale on a person’s credit report, it is typically less damaging than a Bankruptcy orForeclosure. A Delaware home seller that has been through a Short Sale can often go back into the market and qualify for a mortgage in less time than if they had declared Bankruptcy or allowed the property to go into Foreclosure. Some people owe more than the value of their property, but have the ability to pay their mortgage. Utilizing a short sale can allow them to meet today’s market price. In many cases other assets are not encumbered.
A lender needs to approve the Short Sale and will often hold no deficiency judgment against the borrower. Some mortgage providers report the debt “Satisfied” for less than full amount. A borrower should discuss the impact of a Short Sale with a qualified accountant or credit specialist to determine the impact on their credit report before proceeding. For Delaware home owners facing Foreclosure, a Short Sale may keep a borrower from having a judgment against them in the event the property is sold at auction or Sheriff Sale. Many times the mortgage company will not hold any deficiency judgment against the borrower that sells their property short. They do, however, hold a deficiency judgment against the borrower in a Foreclosure.
Experiencing these situations can be terribly stressful and even affect a person’s health. For someone facing any of these situations, it is important to keep perspective. Many good and honest people are being affected by the economic tide. Remember, “this too shall pass,” and “its only money!” There are a growing number of qualified professionals that are available to help. Seeking out a qualified Delaware Real Estate Agent that is experienced in Short Sales is a great first step.
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