Short Sale vs. Foreclosure
For homeowners facing financial distress, understanding the difference between a short sale and foreclosure is crucial. Let's explore the concept of a short sale and its benefits over foreclosure.
What is a Short Sale?
A short sale occurs when a homeowner sells their property for less than the outstanding mortgage balance. The buyer of the home is a third party (not the bank), and proceeds from the sale go to the lender. The lender either forgives the difference or issues a deficiency judgment against the borrower for the remaining amount owed. We always try to negotiate forgiveness for our seller's.
Benefits of a Short Sale over Foreclosure:
- Move On To The Next Chapter: A short sale allows homeowners to gracefully exit their current situation and move on with their lives, rather than enduring the prolonged distress of a foreclosure.
- No Cost to the Seller: In most cases, a short sale doesn't cost the seller anything. All agent commissions, title company fees, and other closing costs are typically paid by the lender.
- Less Impact on Credit: While a short sale still affects credit, its impact is generally less severe than a foreclosure. A short sale may reduce a credit score by 50-130 points, whereas a foreclosure can slash it by 200-300 points. A foreclosure will stay on your credit for 7 years, where a short sale typically only stays on your credit for 2-3 years.
- Relocation Assistance: Some short sale programs offer relocation assistance, which provides homeowners with a monetary incentive to move to a new residence. Our agents will also assist in helping you find a rental property.
If you're facing a potential foreclosure, consider the short sale option. While it's essential to act quickly, it's also crucial to seek advice from real estate professional who specialize in short sales to guide you through the process.
Want to learn more about the foreclosure process and what options are available to you? Schedule a FREE NO OBLIGATION CONFIDENTIAL Consultation with me by clicking on the calendar link below...
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