Short Sale
What is a short sale? 
A short sale is when you sell your home for less than what you owe on your mortgage. The term comes from the fact that the purchasing amount is short of the amount owed, not that the process is faster than a traditional sale. Lenders often agree to a short sale because it could save them money associated with the foreclosure process. Do you owe more on your property than its market value?
7 Reasons to Consider a Short Sale
1. No Cost to You. The lender covers all the fees including Taxes on the sale, Real Estate Agent, Title Insurance, and Attorney Fees. Why? If they foreclose on your home they foreclose on your home they would have to pay for all costs.
2. Your debt will be erased! In most cases, if you are selling because of financial hardship, then even though you are selling for less than what you owe, the remaining debt will be erased. Is your loan owned or insured by Fannie Mae, Freddie Mac, VA or FHA? Their policies state that if you’re selling because of financial hardship, then your debt will be erased from your first mortgage.
3. You can buy another home sooner. Depending on your lender, a short sale allows you to buy another home, on average, in 3 years with good credit. If your house is foreclosed, you may have to wait up to 7 years.
4. Your credit suffers less damage. Unfortunately, both a short sale and a foreclosure will negatively impact your credit score. However, with a short sale you have a better chance of rebounding because your debt to income ratio will be lower. (A lot of debt hurts your credit score.)
5. You don’t have to pay rent during the short sale process. If you’re really in synch, you can stop your mortgage payments (your credit will suffer), but you can save money for renting a home after the short sale process is complete. Short sales can take 6-9 months; during that time you can start saving for your future.
6. You can often rent a comparable home for less than your current mortgage payment. In one example, a client’s mortgage was $1,500. After a short sale they rented a bigger house for $850 per month.
7. Avoid the humiliation of disclosure. We understand that times are tough. Don’t let this hiccup ruin your future.
