If you have negative equity, a short sale is the ONLY way to sell your home without bringing thousands of dollars to the closing table to make up the different between what the home sells for and what the lender is owed. If done correctly, a short sale can provide financial relief and stability to you and your family with minimal damage to your credit. With virtually no drawbacks, the real question is why NOT short sale?
The primary short sale benefits are as follows:
I've been working with short sales since before the market turned in 2007, giving my experience an edge. Over the years, I've heard a lot of things about short sales, but most of them are simply not true. Let me help you separate the facts from the fiction:
The truth here lies in the simple fact that the foreclosure process is very expensive for the lender. Not only do they have to worry about managing the property until they sell it, but they now have to pay all the liens against it, back-due HOA fees, Realtor fees, legal and court fees, plus pay their attorneys to foreclose in the first place. Time consuming and costly, the lenders would generally rather avoid foreclosure as a whole. If they would rather foreclose, then why would they offer so many cash incentives for short sales?
Whereas this was the case in the beginning of the market decline, lenders are no longer requiring that you miss a mortgage payment for short sale approval. Unfortunately, there is a small chance that the mortgage insurer will request that you be delinquent on a payment, but it’s rare. Why ruin your credit with months of missed payments if you don’t have to?
Foreclosure is a very long, time consuming legal process that can take as long as 24 months or more. Plus, it takes very little to stall a foreclosure – if we have a contract on your property, the lender will typically stall the foreclosure even the DAY BEFORE it’s scheduled!
Considering all of the people that contact a Realtor to look SPECIFICALLY at distress sales (short sales and foreclosures), I would say that a home in this situation has an even better marketing angle. For buyers, the benefit of buying a home priced at or below market value is obvious.
It’s easy to see how short sale myths can snowball into big roadblocks in your decision making process, but the one thing you can do is call or email our office and let me or one of my qualified team members answer any questions you have and address your concerns. Perhaps a short sale isn’t the best route for you to take – but it wouldn’t hurt to explore your options.