Nobody ever buys a house thinking they are going to end up in foreclosure, but sometimes the worst things happen to the best of people. If you have found yourself facing the threat of foreclosure, you have probably started looking into what options you have to avoid foreclosure. One of the most talked about options is a short sale. Now you’re probably thinking, “should I consider a short sale?” While short sales might not be for everyone, it is something that you should seriously consider.
A short sale is when your lender allows you to sell your property for less than what you currently owe. The idea behind a short sale is allow the lender to avoid the expenses associated with a foreclosure and obtain a majority of the debt owed. A short sale is not going to get rid of the debt that you obtained with your mortgage, you will still be responsible for the amount not recouped during the course of the sale, but it will always look better than a foreclosure.
So, let’s take a look at the benefits of a short sale:
Prevents a foreclosure
Perhaps the biggest benefit of a short sale is that it prevents you from going into foreclosure. The foreclosure process is never any fun, for you or the lender, and actually ends up costing both sides quite a bit of money along with plenty of other hardships.
Foreclosures seriously ruin your credit and they take years to come off. With a short sale you avoid ruining your credit, plus it saves you money and possibly saves you from having to file bankruptcy because of the expenses associated with a foreclosed house. Plus, lenders like short sales because it gives them the chance of getting back some of their investment without the expenses of foreclosing and selling a foreclosed home.
Helps the housing market
One of the worst things about foreclosures is that they negatively affect the housing market. If you allow your house to go into foreclosure the value of your neighbors property is going to declinerapidly. When trying to sell a home in an area with foreclosures, homeowners have to drastically reduce their asking price, which means they lose any equity they may have in their homes. Opting for a short sale prevents the neighborhood from declining property values, plus it helps get rid of vacant houses.
Less stress for the homeowner
With a foreclosure once the process starts it becomes very stressful, very quickly. The mailbox is filled with letters demanding payment on an almost daily basis, you get letter after letter that you cant make heads or tails of, etc. With a short sale you will still need to deal with offers and legal documents, but what takes place is more along the lines of a traditional sale than a foreclosure, so it is far less stressful.
Two other benefits of a short sale to consider are that they help you avoid scams, as well as give you peace of mind. With a short sale you are not going to fall for the scams that prey on people who are looking for a miracle to save their home, like those ads that say they can stop the foreclosure process. Just like a traditional sale, a short sale allows you to directly work with the people buying your house, which makes it almost impossible to fall for a scam.