Real estate market fluctuations and economic downturn may lead you to an unimaginable situation, where you put your property for foreclosure. It is a distressing process, which comes with stress and exhaustion alongside losing your property. You can manage the distress and convert it into your benefit by opting short sale over foreclosure. Here is why short sale is better than foreclosure.
Protection of Your Creditworthiness
For the lenders, foreclosure means a total loss of the asset value, as well as of the creditworthiness. Therefore, a majority of the lenders choose short sale to ensure that some portion of the asset value is recovered. However, most of the homeowners are worried about the deficiency judgment involved in the short sale. When the amount of short sale is lesser than the remaining amount of mortgage, then the bank files lawsuit against the homeowner, which may appear on the homeowner’s credit report. However, the bank will most likely avoid filing a lawsuit as it is hectic and time-consuming. Instead, the bank will deduct the losses in terms of proven hardships like loss of wages and divorce. This way, the damage will not appear on the credit report and all of your creditworthiness is saved. There is no such option in foreclosure.
It Saves Your Money
According to the US Congress Joint Economic Committee, the homeowners undergoing foreclosure suffer an average legal cost of around $7,500. Foreclosure is a lengthy process, which requires a lot of documentation, meetings, and other procedures. Simply put, foreclosure steals a lot of money in terms of additional costs, alongside the aforementioned legal cost. Short sale recovers a lot of cost, which the bank is looking to recover. Furthermore, the banks typically do not pursue deficiency judgment with a Short sale. This is usually waived. Short sale not only saves your money but it also prevents a lot of stress and exhaustion. Not to mention you could possibly get some relocation assistance from the Short sale.
It Secures You from Scam
Foreclosure scams have become quite common since the decline of price after housing bubble burst. The struggling homeowners are easy targets for scammers. Firstly, the struggling homeowners seek better opportunities. For them, what else could seem better than a deal that saves their house without the loss of money? Secondly, the struggling homeowners are financially vulnerable to file lawsuit against the scammers, which makes the escape easier for the latter. Scammers will offer you catchy slogans and loan tactics to help you save your house. They will charge high fee for these services, comparing the fee with the money you can save by ‘not putting your house for foreclosure’. However, they vanish after the loss, leaving you abandoned. Short sale is a sure shot that saves you from larger scams and financial losses. Short sale SHOULD NOT cost you anything. Your bank will pay for the commission, attorney fee, closing costs, and in most cases, pay you relocation assistance.
Short sale is better than foreclosure in many ways, if processed under guided supervision. Hire a real estate agent who is an expert in the art of negotiations of a short sale. Short sales are a very complex, complicated transaction. You need the right team around you to ensure the success of the short sale. The Keller Group has many years of experience and has closed hundreds of short sales. We know how to get a Short sale successfully closed.
Contact Heather J Keller and Jody Sholeen, The Keller Group, at 312-607-7928 or online for a free consultation.