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Compared to a Foreclosure...
There are no disadvantages to a Short Sale when compared to a Foreclosure, just a few hurdles. First of all, let me briefly define a Short Sale. Simply put, a Short Sale is a situation in which a home is sold to a new buyer, and the sales price is less then the face value of the mortgage loan, plus back payments (if any), plus all other sales and closing costs such as Title, Escrow and real estate commission fee's.
How do I benefit?
The main advantage of a Short Sale is it is less damaging to ones credit. For the most part, a Short Sale appears on one’s credit report as a settlement on account. Loan officers state that a Short Sale may hinder another home purchase for up to 2 years while a Foreclosure can hinder another home purchase for up to 4 or 5 years.
Some credit counselors claim that a Foreclosure will damage ones credit by as much as 200 points more then a Short Sale. If one intends to borrow money for a major purchase, one’s ability to get another loan at a reasonable interest rate is easier achieved without a Foreclosure on your credit report.
The other advantage of a Short Sale is the sense of dignity and responsibility. During a Short Sale, the homeowner is marketing the home for sale with an experienced Short Sale Realtor or Short Sale Specialist, in an attempt to sell the home at the best price thus bringing in as much money as possible to the Bank. When the home is sold to a new home buyer, the homeowner moves out upon closing in an orderly and dignified manner, just like any other home sale transaction.
How does the bank benefit?
Many banks today would prefer to accept a Short Sale versus going through with a Foreclosure repossession of the property. In today’s declining market prices, the Short Sale Specialist must convince the bank that accepting the offer submitted make the best financial sense for the bank. In a Foreclosure, the bank has to spend thousands of dollars and wait months to take possession of the home. They then need to spend monies to maintain it, market it and wait at times months to sell it. After all of these expenditures, they most of the time would have to sell the property for less than what they could during a Short Sale.
Hire a Specialist!
Home owners in this situation should contact an experienced Short Sale Specialist to not only list and market their home, but also handle the entire short sale process for them.
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