10 Reasons to Consider a Short Sale
There are many reasons a homeowner may want to consider a short sale of their property. Ten of the most common reasons are:
1) Underwater Mortgage
Being underwater in your mortgage means that you owe more on your home than the home is worth. Even if you could sell your home, you could not sell it for enough to pay off the mortgage. An underwater mortgage means you have negative equity in your home.
2) Financial Hardship
The reasons for financial hardships are often outside the control of the homeowner. These could be loss of employment, divorce, illness or even death of a family member.
3) Loan Modification Did Not Work
Some homeowners work with lenders to modify the loan through the Home Affordable Modification Program (HAMP). If the loan modification does not work, then foreclosure may be a real possibility. A short sale is often considered as a way to circumvent the foreclosure of your home after other methods have failed.
4) Prevent Foreclosure
Many financial hardships do not happen overnight. Often, families suffer from financial difficulty long before they come to the conclusion they can no longer afford to make their mortgage payments. The short sale of your home is a pre-foreclosure process and many people enter into the short sale because they know the lender may start foreclosure. Homeowners do not want a foreclosure on their record, so they turn to a short sale instead.
5) Credit Impacts
There will always be an impact to your credit when you go through a short sale, foreclosure, or bankruptcy. Depending on your credit history when you start the short sale process, a short sale may have less impact than a foreclosure or a bankruptcy. The time you must wait to purchase a new home may also be less than with a foreclosure.
6) Little or No Cost
When a seller decides to list their property as a short sale, there is often very little added financial stress to the seller. There is also no cost to the seller to use a short sale facilitator to negotiate the short sale with their lender. These fees are paid at closing but not by the seller.
7) Avoid Eviction
One thing distressed homeowners worry about is the fear of eviction. With a short sale, you generally stay in your home longer and if you work with a short sale facilitator, they will work to negotiate a specific move-out day for you. This eliminates the fear someone could knock on the door at any time and start the eviction process.
8) Debt Relief
When the short sale is completed, the financial stress of the mortgage will be gone. In addition, you will no longer be responsible for property taxes or maintenance costs for upkeep on a home you cannot afford. The negotiators at Short Sale Facilitators work tirelessly to minimize the potential for a deficiency after the sale. (A deficiency is the difference between what the home sold for and the amount owed to the lender. A strong negotiator works with lenders to minimize the possibility deficiency debt.)
9) Relocation Expenses
In many cases, there are funds available for relocation expenses. Government programs such as HAFA provide for relocation and in some cases, lenders may provide relocation funds as well.
10) Positive Outcomes
When a short sale is complete, the seller has an opportunity for a fresh start without a foreclosure or bankruptcy on their record. The lender has avoided the litigation costs of foreclosure and the buyer gets to purchase property at a good price.
Making the decision to give up your home is difficult and when combined when health, family or financial hardships the stress adds up. There are considerations and pitfalls that you should consider when you list your home as a short sale. Alma Korshak of Short Sale Facilitators of Casselberry Florida encourages you to ask questions!
Short Sale Facilitators. The Power of Negotiation.