Short Sales
As foreclosure rates hit record levels, homeowners are turning to
short sales as a way to avoid foreclosure.
So, What is a Short Sale?
In a short sale, a broker negotiates with the homeowner's mortgage lender to accept a price that's less than the amount owed on the property. As part of this arrangement, the lender typically agrees to forgive the rest of the loan. As a result, the seller doesn't have to go though a foreclosure, the buyer picks up a property at a discount,and the lender avoids taking on the burden of unloading a foreclosed property.
Advantages For Homeowners A shortsale can be a way for homeowners who are behind on their payments to escape some of the worst consequences of foreclosure. Having a home foreclosed upon takes 250 points off the homeowner's credit score, allows the bank to garnish wages, bank accounts, tax returns, and severly effects ability to buy a home, car, etc for the next 7 to 14 years. If a shortsale can be negotiated
- 1/2 the number of points are deducted from the homeowners credit score.
- The homeowner can qualify for a new mortgage, loan, etc in 1/2 the time.
- The bank agrees to discharge remaining debt and can not attach the homeowners income or sue for the difference.
- Buyers can find a good home at a discounted price.
