A short sale is often considered as one remedy to preventing foreclosure on your property. It offers reprieve to the seller who wants to meet their mortgage obligation quickly should the threat of foreclosure arise.
So what exactly is a short sale and how does it work? What are its pros and cons? Below is a further exploration into what a short sale is really about.
Defining A Short Sale in Context
In a nutshell, a short sale is where a homeowner sells their house quickly for less than the mortgage they owe.
A short sale is considered a win-win for the homeowner and lender because it is beneficial to each. For the homeowner, they don’t get foreclosed and wreck their credit score as badly. As for the lender, they are assured of avoiding a protracted foreclosure process that leaves their loan in limbo and a lot of legal fees.
How Short Sales Are Done
The key to deriving the benefits of a short sale is to understand how they ought to be done. It must be done as meticulously as possible paying heed to the parties involved. When you undertake a short sale, you will need to find a buyer for your home.
Many people enlist the help of an experience real estate broker if they cannot find a buyer themselves. The key reasons for employing the services of one are: they are widely experienced in short sales and have the required negotiating skills. More emphasis is placed on the latter because short sale deals often involve a lot of negotiation. You need a person that can get you the best possible deal in the market and convince your lender to agree to it.
The Key Benefits of Short Sales Versus Foreclosure
Short sales offer a solution to the home owner who finds themselves on the verge of foreclosure. This reprieve comes in two main ways: a smaller hit on the seller’s credit report and a much shorter, less stressful legal process.
If you get foreclosed, you can kiss your chances of getting a new loan goodbye for a very long time. Once a foreclosure appears in your history, it essentially means that you are lending risk. Lenders will outright reject your loan applications.
The Cons Of Short Sales
The first con is that you must find a qualified and reliable buyer. This can take time and careful planning.
Aside from a extended selection process, approvals for a short sale can take a lot of time. There is a lot of red tape with lenders and insurers. They must be satisfied that the short sale will be beneficial to all involved.
In the event that the short sale request falls through, the bank will continue to foreclose on your property. They still have to find a way of recouping their money thus foreclosing will be their best plan in most cases.
This is a simplified version of what you need to know about short sales. If you are contemplating selling your house in Miami quickly through a short sale, you must first consult a professional home buyer to get it right. Contact us today and we’ll be happy to help!