No homeowner thinks or even imagines of facing a foreclosure. But, sometimes, the economic breakdown, financial crisis, or real estate market fluctuations put the homeowners into a stressful situation of losing their homes. And, everyone knows how distressing and damaging the foreclosing process is.
However, there is an alternative to foreclosure, i.e., short sale. It is a process in which the bank lets the homeowners sell their house for less than what is owed. Have a look at the five reasons why a short sale is a better option than letting your property sliding into a draining process of foreclosure.
Helps Protect Your Credit
One concern most homeowners have is that the bank will sue for a deficiency judgment post the foreclosure. The bank can also file a lawsuit against the homeowner to recover the difference between the paid amount and loan amount. This deficiency judgment will have a negative impact on their credit report.
However, instead of enduring a lengthy process, banks often cut their losses with the homeowners who couldn’t pay mortgages due to a valid hardship. This reduced amount will reduce the burden on the homeowners and protect the credit score.
Give Homeowners More Control
Foreclosure is an arduous process for the homeowners. It involves confusing documents, demand letters, and exchanges with the lender’s team. A short sale also involves paperwork, and meetings, but the entire process is just like a traditional sale.
A short sale allows the homeowners to play an active role in the process of dealing with the homebuyer, real estate agent, and the bank. In other words, it is more manageable for the homeowners that begging for mercy at a bank during the foreclosure. So, talk to the cash home buyers today to know how to buy a short sale in NJ.
Helps The Seller Avoid Any Potential Scams
There have been many scandals related to foreclosures over the last decade. Some scam artists will offer money-back guarantees or promises to save homes from foreclosures to lure the homeowners into paying them funds.
Choosing the route of a short sale will destroy such opportunities for the scam artists. It works like a regular home sale process. The homeowners can check about the legitimacy of the professionals they are working with. This helps reduce the possibility of scams or fraudulent deals.
Provides Financial Benefits
High mortgage payment or falling home values are the most significant reasons to short sale a house. Further, paying a mortgage higher than your home’s value is risky because the home value in your locality may or may not rise.
It drains you financially, leading to foreclosure. When the mortgage payments aren’t affordable and your home has dropped in value, a short sale allows you to sell your home.
Offers Peace Of Mind
Real estate transactions are stressful by nature. However, this stress doesn’t compare to the trauma and pressure a homeowner faces during the process of foreclosure. Credit hit and the stigma related to foreclosure is unavoidable.
While short sales are not completely risk-free, it opens the door to better solutions for the homeowners, allowing them to avoid lengthy legal actions. It lessens the financial burden and saves the credit score, leaving the homeowners in a positive position. In a nutshell, short sales offer the homeowners a platform from where they can start rebuilding and reorganizing their finances.
These are some of the reasons why a short sale is a better option over a foreclosure. While it doesn’t absolve you from the debt you have incurred with a mortgage, it is still better than a foreclosure.