Recently, more than ever, people keep hearing the words short sale coming up. While the concept of a short sale is quite simple, the process isn’t always that simple. The word short refers to the amount paid compared to the amount owed. Not the time it takes to sell the home.
In simple terms, a short sale is when a person that has a mortgage on a property with a principal balance that is higher than the current market value and requests a payoff amount less than the bank is owed. If the bank agrees to settle for an amount less than is owed, that constitutes a short sale.
A short sale for a seller is not for everyone. You must meet certain criteria to be eligible for a short sale. You may be disqualified for example if you have too many assets. View 10 reasons listed below.
• 1. Health issues
• 2. Rate Increase
• 3. Predatory Lending
• 4. Divorce/Separation
• 5. Over Extended
• 6. Job loss or Transfer
• 7. Multiple house payments
• 8. Distressed Sellers
• 9. Declining Market
• 10. Pre-Foreclosure
A short sale has many advantages to a foreclosure for everyone involved. It gets the seller out of a bad situation, it gets the buyer a home for a price usually below market, and saves the bank from the expense of foreclosing with the chance of getting back a damaged asset that then has to be repaired and maintained.
See the list below comparing a foreclosure to a short sale.
Short Sale
• Negotiated Settlement
• Credit bruised
• No Attorney fees
• Easier to buy again
• Liens negotiated
Foreclosure
• Foreclosure
• Credit ruined
• Big Attorney fees
• Foreclosure on credit 10 yrs
• All liens extinguished
It is up to you what you may find suitable for your situation. I would suggest a consultation with a qualified real estate attorney that specializes in these matters. Contact me and I will set up a free consultation for you with absolutely no charge and no obligation.