A short sale occurs when a mortgage lender agrees to accept in full, less money, than what is currently owed on the mortgage loan. A foreclosure, on the other hand, is when the mortgage lender repossesses the property in the event where a mortgagee may be falling behind on the payments. While a short sale is where a homeowner can sell his property willingly, a foreclosure is when the mortgage lender repossesses the house without the homeowner’s will. Both, short sales and foreclosures, demand the homeowner to surrender the property, but short sales certainly have some benefits over foreclosures.
- Better Credit
While short sales have some credit implications, it’s not as bad as the credit implications of foreclosure. It is much easier and quicker to rebuild your credit with a short sale history than with a foreclosure. Foreclosures can reflect in your credit report for as long as seven years versus only a few years for a short sale. In some instances, a short-sale seller can even purchase another house immediately! Foreclosure reduces your credit score by hundreds of points as compared to a very insignificant amount of points for a short sale seller.
2. Less Expensive
Foreclosure is an involuntary process and the mortgage lender incurs thousands of dollars in legal fees, delinquent charges, and eviction costs, etc., and these expenses get added to the unpaid principal balance of the loan and become the homeowner’s responsibility. In a short sale, the lender may not account the homeowner for the deficiency balance since the amount to recuperate in short sales is significantly less than that of a foreclosure.
3. Maintain Dignity
A short sale is more like a traditional sale where the homeowner is in control of showings and signing contracts and all the real estate disclosures. Going thru the foreclosure process is a lot more stressful and more financially damaging. Since foreclosure is an involuntary process, it involves the eviction process where the homeowner is served with a notice of eviction and has to vacate the property timely. This legal process may be discomfiting and shameful to the homeowner. In a short sale, the homeowner/seller can negotiate with the buyer, the sale and possession terms. The homeowner will better understand and respect the term of the purchase contract in a short sale transaction.
4. Benefits the Housing Market
Just like short sales benefit the homeowners/sellers avoid foreclosures, it helps buyers purchase affordable homes. Short sales tend to sell at a little lower price than the actual market value. The property values in a neighborhood tend to be negatively affected when there are many vacant and abundant homes in a neighborhood. Short sales tend to revive the economy and the housing market much faster than foreclosures.
About Your Lake Elsinore Short Sale Experts
At Legacy Homes Realty, we are very well equipped to handle your short sale transactions. It takes a tremendous amount of work, time, negotiation, and experience to be able to handle short sales flawlessly and precisely. Each short sale is different than the other in terms of lenders involved, types of liens, short payoff amounts, timeframe, and negotiators. It takes a special set of skills to get a short sale approved and closed!
We have been doing short sales for over ten years and by now we have worked with various lenders in the industry and are very well aware of how their process works and what it takes to get a short sale approved. Besides being certified with designations such as Short Sale & Foreclosure Specialists (SFR), we at Legacy Homes Realty, have a tremendous amount of experience handling short sale transactions and getting them approved. We don’t charge any ‘short sale negotiating fee’ to our Sellers or Buyers. If you are going thru a tough time and if you are financially distressed and are not able to sell your property as a traditional sale because the value is upside down and you now owe more than your property is worth, don’t hesitate to reach out to us to discuss your options. We will be glad to set up a virtual appointment or a telephone conference with you to answer any questions or clear any doubts you may have regarding short sales and how they work.
If you’re thinking of selling your home and are not sure when is the right time to sell your home then feel free to check out our other blog posts “WHEN IS THE BEST TIME TO SELL HOME IN LAKE ELSINORE, CA, IN 2021?” If you want to know how much your Lake Elsinore home is worth then Click Here or fill out your address below and click find my value.
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