Benefits of a Short Sale Versus Foreclosure

 Benefits of a Short Sale vs. Foreclosure

For homeowners trapped in the unfortunate situation of having to choose between a short sale vs. foreclosure, it may feel like being trapped between a rock and a hard place. This is very understandable for the homeowner facing foreclosure; it appears to be an end to a broad canvas of hopes and dreams.

 

The homeowner, or homeowner's, may have seen themselves growing old in the very house they’re now losing. Perhaps they imagined starting their family there or imagined one day standing on that beautiful front porch as they waved good bye to their grown up kids. Maybe they viewed it as the key to their financial independence – a tool to build equity. Faced with the decision between a foreclosure vs. short sale, it’s easy to see how a homeowner who had their life and dreams wrapped up in a house would have difficulty saying goodbye. To that homeowner, losing that house is like slamming a door shut on the life they dreamed of.

 While it may be difficult for the homeowner to see at first, a closer look at these two choices reveals an uplifting truth – that one of these options doesn’t actually involve closing the door on one’s dreams of home ownership and financial prosperity. Perhaps it can be better seen as a temporary setback, a small bump in the road towards the rewards of home ownership. A short sale can even be seen as a fresh start. It allows you to stop foreclosure and relieve the stress associated with it, eliminate your over sized mortgage payments, stop additional damage to your credit, and start over again. Most homeowner's would be amazed at how fast they get back on their feet once the stress and burden of making enormous mortgage payments on a house worth half of that mortgage, is gone.

 

Benefits of a Short Sale

 

1. A Short Sale gives you a fresh start

Choosing a Real Estate short sale can in many cases stop foreclosure in its tracks. While missed mortgage payments may have already done some damage to both your psyche and your credit, why choose to prolong the inevitable? A short sale not only allows you a quick path to a fresh start, it also carries with it numerous other benefits, which will be discussed below.

2. A Real Estate Short Sale will do far less damage to your credit

 As was previously mentioned, once you’re at the point of choosing between foreclosures vs. short sale, you’ve likely missed a few mortgage payments and had a foreclosure filed. This in itself has caused an impact to your credit. However, allowing the foreclosure to complete will have further negative ramifications on your credit score, particularly when you can be evicted and your house is repossessed. A short sale on the other hand, allows you to avoid the negative implications associated with foreclosures and will reflect a settled or paid as negotiated on your credit history. This is obviously the desirable alternative.

3. A foreclosure is public

 

Word of a foreclosed property gets around quick due to its public nature. Your neighbors will see the eviction notice on your home and your house being put up for public auction due to foreclosure. For distressed homeowners, this public spectacle can be a major humiliation on top of what is already an unfortunate situation. With a short sale, the house is listed on the market quietly and with dignity, just like any other listing.

4. You will more than likely be able to stay in your home until the Short Sale concludes.

 

During the short sale process, which may take up to a year to complete, you will typically be able to continue living in your home until the short sale has completed, and doing so, you should be saving for your next move.

5. You can become a homeowner again much sooner

 

A foreclosure can be a major setback to your dream of home ownership, with a waiting period of between 5 to 7 years before you can attempt to buy a house again. For those who want to buy a house after a short sale, you are eligible to qualify to buy another home in only 2 years after your short sale

6. Short Sale costs you nothing

 

A short sale does not cost you anything. Your lender will cover the costs of selling your house, including Realtor commissions, attorney fees, as well as title insurance. It bears mentioning that a foreclosure doesn’t directly cost you anything either – it just comes with a more negative consequences that will cost you in the long run. So when the beneficial choice costs nothing and the alternative carries a number of negative short term and long term consequences, the decision between a short sale vs. foreclosure should be a simple one. Not to mention, upon a suc

cessful completion of the short sale, you could qualify through the Home Affordable Foreclosure Alternative (HAFA) Program. In this program, the homeowner can receive up to $3,000.00 CASH BACK towards their relocation! That’s not all, your lender can also benefit from this, receiving $20,000.00 and up!

 How to take advantage of the benefits of a Short Sale

While a foreclosure requires no action, taking advantage of short sale benefits requires experienced and skilled representation. Except in some states, a lender is not legally obligated to release a borrower from paying for any deficiencies between the selling price of their home and the loan.  This means that unless you can convince your mortgage lender otherwise, you’ll still be stuck with a huge amount of debt after you sell your house in many cases.  This is where choosing the right agent can make a world of difference.

A Realtor specializing in short sales has the experience and the expertise to represent you in short sale negotiations and present the right Real Estate short sale package to your lender, convincing your lender to accept less than the full amount of the initial loan and allowing you take advantage of the benefits of a short sale. Enjoy a fresh start, and get back to enjoying life and working towards your dreams. Our wide ranges of highly experienced Short Sale Realtors are looking forward to getting to know you and help get you through your successful short sale! Contact us now!

 

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