Short sales offer many advantages to homeowners. Many homeowners, though, never take the trouble to even call their banks when they find themselves in financial difficulty. Granted, many banks greet their borrowers with a formidable voice maze, but, gradually, even the most clueless are realizing how dumb that is.
So, if you are upside down in your mortgage or experiencing financial challenges, at least call me at 626-641-0346 for a free consultation or email me at firstname.lastname@example.org. A short sale is a great option to avoid foreclosure. Let me personally tell you some great tales of borrowers rescued from the brink of financial disaster by doing a short sale.
Advantages of a short sale:
1. You may walk away owing nothing. You are often able to negotiate away all the debt. Banks know they will net more money with a short sale versus foreclosure. In fact, a recent study showed banks would net 20% more money with a short sale v. foreclosure.
Because of this, most short sale banks completely forgive the debt. Yes, they might be losing $100,000, or more. However, they would rather cut their losses and let you go free.
2.You will be able to buy another home much faster. If the rest of your credit report looks good, you may qualify for a mortgage as soon as 18 to 24 months after the close of your short sale. If you have some money and are current before beginning the short sale process, you mayeven be able to buy a new home right then and there.
3. You will be able to get a good night’s sleep. You will no longer have to worry about that Notice of Default posted on your door or how you will come up with all the money to pay your debts.
4. Your credit will suffer much less. Your credit score typically drops by 250 to 300 points on a foreclosure. With a short sale, your credit may only drop by 50 points, provided you are current on all your obligations.
Disadvantages of a Short Sale:
1. You have no guarantee your bank will accept the short sale offer. Working with a short sale specialist, such as myself, however, will give you a much better chance. Plus, banks are working very hard to improve their short sale processes, so at least with some banks, it’s getting easier.
2. You will have to document all your income and assets. This, obviously, is to protect the banks and is similar to what you must go through to obtain a loan.
3. Your short sale may drag on for months. Some short sales I’ve negotiated have taken as long as a year, depending on the bank. This process is hard on your psyche, but, on the other hand, most sellers are not paying their mortgages during all that time.
4. You may have to bring money to the table. Whether your buyer insists on repairs or the bank insists on a promissory note, you may have to pay something out-of-pocket, though the months of not paying your mortgage may help you there. Usually, the costs are minimal and I have yet to see a bank demand a promissory note, though it remains a possibility.
A short sale is a good option for most homeowners. It allows you to get rid of the debt and move on with your life. Many people rent another home for less than their mortgage payment or, as mentioned above, may purchase a better home for less than they owe on their current one.
I’d be happy to fill you in on the details not covered here. Just give me a call at 626-641-0346 or email me at email@example.com.