The advantages of Short Sales for those in desperate financial situations

The advantages of Short Sales for those in desperate financial situations

Each year an increasing amount of homeowners are facing financial problems due to an unstable economic climate and sometimes new mortgages payments are just too high for homeowners to pay, so they’re looking for new alternatives to try and avoid the prospect of foreclosure. The reason people find themselves in this situation is often because they are lured in with a loan that has attractive low payments, however, these low payments eventually will come to an end, leaving homeowners in a sticky financial situation.

But it’s not the end of the line, you do have options. You may have already considered selling your home, thinking it’s the best solution, however when you turn to your realtor, you hear the worst possible news: your house will not sell for enough to pay off the balance of your mortgage loan. You may then attempt to sell your house on your own but it can take a long time and a lot of effort and in most cases you are eventually faced with an inevitable foreclosure after all.

In the 11^th hour you may still have an alternative available to you and that alternative is a short sale, this occurs when homeowners are struggling to keep up with their mortgage repayments and can help them avoid foreclosure. What happens is you sell your property for less than what you owe your lender, your lender will then agree to accept this payment as satisfactory and go ahead with the short sale. This will mean that you receive no money from the sale of the home, but the lender will not report a foreclosure to the credit bureau, meaning your credit will, in most cases, go unaffected.

In order to be eligible for a short sale solution, you must be able to prove to your mortgage lender that you are experiencing a financial hardship that is causing you the inability to make your monthly mortgage payments. You must also show that you are willing to go through this process (which can be a long one); it can be hard when you know the outcome may not be great, but a short sale could save you from foreclosure, and eliminate your debt and allow you to walk away without having to pay any additional money at closing.

It is important to understand that foreclosure needs to be avoided at all costs, as it has some serious drawbacks, you lose the right of home owner ship and have to return to the market as a renter, you must also suffer the embarrassment of banks posting notices of Public Sale on your front door, letting your neighbors and friends know of your financial problems and above all, your credit will take a serious turn for the worst, as a foreclosure will remain on your credit card for up to 10 years and will be unable to buy another home for 7 years, and you may be responsible for a deficiency judgment which will only add to your further financial hardships.  When faced with issues like these, a short sale could be the best option available to you and your family.

You can retain your dignity knowing that you have successfully sold your home without suffering from the social and financial implications of foreclosure. You also will no longer have to make mortgage payments unless you choose to make them and you can buy a new home in 2 years instead of the possible 7 years you would have been faced with had the property been foreclosed.  A short sale may be a last resort, but it’s a resort that would benefit you far more than a foreclosure.

While anyone can take care of a short sale themselves, it is strongly recommended that you consult with qualified professionals if you are considering selling your home as a short sale.  Consult with an experienced Realtor and always review your situation with a qualified attorney who has the experience needed to guide you through this long and sometimes difficult process.