Why choose a short sale?

As we mentioned in our definition of ‘what is a short sale,’ short sales a proactive strategy for Fresno homeowners to take to avoid foreclosure on their home.

That might be over-simplifying it a bit, so here we will cover ‘why choose a short sale’ in further depth.

A WIN-WIN FOR ALL PARTIES

Short sale research is showing several positive outcomes for all parties involved after a short sale is completed.

Homeowner relief – A short sale releases the homeowner from a very stressful situation relating to the mortgage debt and the financial hardship of trying to maintain the mortgage payments. The home is sold and the lender forgives most, if not all, of the homeowner’s mortgage debt. It’s an opportunity to move on to the next chapter and start a new, less stressful beginning.
Neighborhood preservation – Letting a home go to foreclosure and potentially sitting vacant for months, if not years, is a serious liability and pull on the neighborhood. The home, when vacant, is traditionally neglected. The yards and the swimming pools create hazardous and dangerous situations. Plus, vacant homes are targets for vandals and squatters.
Buyer value – The buyer of a short sale usually acquires a property at a great value and can begin helping the neighborhood rebuild out of a distressed condition.
Bank liability avoidance – Say what you will about banks (and you’re all entitled to your opinion of how the banks have behaved), but a short sale allows the lender to retain a substantial amount of what is owed them. Plus, the bank loses less money from a successful short sale when compared to the loss it takes from taking a home to foreclosure. Don’t let your home go through the foreclosure process just to spite the bank (the bank really wins in this scenario).

SPECIFIC BENEFITS FOR SELLERS

The negative consequences of a foreclosure make it something to avoid. Period.

If the above list wasn’t enough to convince a distressed homeowner to become proactive, here is a list of challenges a homeowner can face as a result of foreclosure:

Foreclosure follows you – Homeowners will always have to disclose that they have had a foreclosure on any future mortgage application (and some job applications) that they complete in the future. If you were a lender, wouldn’t you want to know this? This is a credit item that is asked about specifically in credit inquiries. There is NO seven-year time limit for disclosing a past foreclosure.
Negative credit score impact – Along with bankruptcy, a foreclosure is one of the most devastating credit score issues out there.
Possible deficiency judgments – The lender could seek a deficiency judgment against the borrower on any amount they do not recuperate from the bank sale of the home.
Ineligibility for a ‘Government-Insured’ loan – The homeowner will not be eligible for a government-insured home loan for as long as seven years in the future. A foreclosure is the one credit report item that is almost impossible to have repaired.
Negative employment checks – Many employers are running credit checks on perspective employees prior to extending job offers.
Negative security clearance impact – A foreclosure can negatively impact a security clearance for military and law enforcement positions.

AVOID FORECLOSURE, CHOOSE A SHORT SALE

It may not seem like it now, but your personal financial hardship will pass and the economy will get better. All of this might happen well after you have defaulted on your current mortgage, so ‘hoping’ for things to get better in time to save your situation isn’t a proactive strategy.

You will feel much better knowing that you did everything you could and that you were proactive in fending off a foreclosure.

Not everyone will qualify for a short sale however.

Let us help you to anwser the question, “Do I qualify for a short sale?“