Discover the key benefits of short sale today. Why wait when you can leverage these advantages to your financial advantage?
Ever found yourself stuck in the complexities of a real estate property that’s under water? A short sale could just be the turn around you’ve been dreaming of. But what the heck is a short sale anyway?
What is a Short Sale?
A short sale isn’t a rapidly completed property transaction like the name suggests. Rather, it is when a distressed homeowner sells their property for less than what they owe on their mortgage with their lender’s approval. Sound complex? Don’t sweat it; we’ll break it down further.
Imagine owing $350,000 on your mortgage, but the current market value of your property only stands at $300,000. That’s where a short sale comes into play. You sell the property at market price and the bank agrees to accept the proceeds even though it’s less than what you owe.
So now we know what a short sale is, let’s jump into some amazing benefits!
Benefit of Short Sale: Avoiding Foreclosure
The most apparent benefit of a short sale is the opportunity to dodge foreclosure. As a homeowner, foreclosure can be a nightmare. Not only does it rip away your home, but it also leaves a disastrous mark on your credit report. A short sale, on the other hand, is a voluntary action and less damaging to your credit score.
Credit Score Recovery
Though a short sale does impact your credit score, recovery is often quicker compared to a foreclosure. This is one of the primary benefits that make it a more attractive option for distressed homeowners.
Lender’s Approval
Although lenders usually end up accepting a lower amount than the homeowner owes, they might still choose a short sale over foreclosure. Why? The financial losses associated with foreclosure are generally higher than that of a short sale. In short, it’s a win-win scenario for both.
Mitigating The Deficiency Judgement.
A deficiency judgment is a court order that requires a debtor to pay off a mortgage shortfall after the sale of the property. Sounds scary, doesn’t it? Thankfully, a correctly executed short sale can help you avoid this!
Psychological Benefit
Foreclosure can be a stressful and traumatic event, leading to some adverse psychological effects. On the flip side, the proactive approach of a short sale can alleviate some of this emotional burden.
The Benefit of Short Sale
In the realm of real estate and finance, a short sale might just serve as a light at the end of the tunnel in the face of a potential foreclosure. Although it’s not a magic wand that erases all the challenges, the benefits of short sale surely position it as an attractive alternative.
With the smart use of short sale strategies, homeowners can dodge the acute trauma of foreclosure, maintain a healthy credit score, get a lender’s approval more easily, and avert the risk of a deficiency judgment. And let’s not forget the peace of mind this strategic solution provides!
So shouldn’t you consider a short sale before that outstanding mortgage leaves you out on the street?
