Doing a Short Sale Instead of a Foreclosure Can be a Smart Move
Losing your home due to the inability to meet the monthly payment obligations is perhaps the most devastating financial situation you could ever face. In fact, a foreclosure puts a big negative mark on your credit report, where recovering from it could take several years. Moreover, a mortgage lender may file a lawsuit against you as part of the foreclosure action. All this would then hinder your ability to secure any kind of credit, leaving you completely helpless.
Consider a Short Sale as a Better Credit Decision
The downfalls of a foreclosure are stomach turning and often irreparable. Therefore, any choice that promises a way out of the situation is a better alternative. A short sale is one choice for property owners who are mired in money problems. Simply put, a short sale means you sell your home at a price that is lower than the financed amount you owe the bank.
A nice component with short sales is that they create a win-win-win scenario for everyone who is involved in the transactions:
* The property owner is able to avoid foreclosure and get their loan paid off.
* The lending institution is able to recover his dues without going through all the drawn out litigation process, high legal fees, of foreclosure and re-selling of the home
* The buyer is able to purchase the home at a reduced price.
Thinking about Doing a Short Sale? Keep the Following Things in Mind
The first safeguard measure you must take when settling your loan payoff through this process is to get it in writing from the bank, stating that all your debts are absolved. Other things to keep in mind to avoid any possible negative consequences of the process are:
* Protect your FICO Score: Do not forget that a short sale is mentioned on your credit report. Therefore, get the bank to report it in a way that is advantageous to you. For instance, if your report merely states that the loan is satisfied, your credit score will not be impacted. On the flip side, if your lender reports you closed out for less than the full balance, your score will drop automatically.
* Seek out good tax information: A liability for taxes on a short sale surfaces when the lender claims that the debt forgiven should be shown as an income. A tax professional can assist you make some choices to limit this liability.
While a short sale is certainly a smarter choice to foreclosure on several grounds, a borrower often struggles to convince the lender to agree to them right away. This is because the lender has to accept to forgo a part of the mortgage claim that they want to recover. Therefore, when faced with a financial crunch, a short sale must be pursued as soon as possible. The longer you put it off, the larger the amount of arrears, and the less likely that the bank will be to accept the process. With that in mind, I have seen homeowners stay in their homes for several months without paying their loan payments and still complete a successful transaction. However, this is a bit risky and I would never recommend this strategy to anyone.
If you, or someone you know, is facing a foreclosure scenario you will want to have a seasoned professional help you in examining your strategies. Certified short sale specialist and Arizona Realtor Jen Wehner has been the top producer for short sale clients in the State of Arizona for all Prudential real estate brokerages. There is no fee to speak to Jen and you can get feedback on what the best choice is for you. Having experienced Realtor work with you could protect you, your house, and your financial future.
You can contact AZ Realtor Jen Wehner today Toll free- 877-293-3259 or Local- 480-748-6925 Email- Jennifer@JenniferWehner.com
Jen Wehner is an award winning Realtor based in Scottsdale Arizona. If you would like to learn more about buying or selling homes in Arizona, click here SCOTTSDALE REAL ESTATE or you can visit Jen\’s real estate blog here ARIZONA REALTORS
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