There are many reasons why you might consider a short sale. In this blog, we will consider these points.
- Short sales are perceived to be less damaging to the credit. However both can be a painful process for the family and can take up to a year to complete.
- If you are not able to pay the mortgage premium, you can try to work with the lender to negotiate a lower monthly payment, called a loan modification. If this fails, a short sale is the best case scenario.
- You are more likely to avoid a bankruptcy with a short sale. Chapter 13 bankruptcy can be used to wipe out the junior liens. Seek good legal counsel.
- It is usually easier and quicker to recover from a short sale situation instead of a foreclosure.
- It is usually quicker to be able to qualify for a new mortgage with a short sale rather than a foreclosure.
- There is the possibility that the lender will forgive the difference between the price of the mortgage and the amount you owe. However be sure to check with a tax advisor, as the forgiven debt must be reported to the IRS.
- By the end of the process, you might not owe anything but you will no longer have your home.
Participating in a short sale can give some control in the process of losing your home. You will be finding a buyer and can negotiate terms with the bank. Although a short sale does damage your credit, by taking this approach, you can avoid the really major hit to your credit that happens with a foreclosure. By decreasing the damage to your credit score(s), you put yourself in a better position to purchase in the near future.
In the end, perhaps a short sale is your answer. The banks are finding that short sales are less expensive and more efficient for them in the long run.
Feel free to contact me for a confidential discussion regarding your specific situation and the choices you have.
Nancy has been licensed to sell real estate since 1991. This includes sales experience in residential, land and investment properties. Due to her vast experience and expertise in the handling of complicated real estate transaction, she as the chosen as the Official Real Estate Sponsor of the Pasadena Bar Association for 5 years.
Nancy approaches each home sale as a new work that will be given a glorious Premiere! The staging, set design, and presentation all result in her listings being the “buzz” all over town. Nancy harnesses the power of the Internet to give her listings a competitive edge. She sees the Web as the most valuable way to respond to the constantly changing real estate climate. Nancy has the experience, knowledge and flexibility to harness the power of the Web in real estate transactions to get her sellers’ properties the best exposure, worldwide.
Like most people in this field, Nancy had another career before entering real estate. After graduating from Northwestern University School of Music, she attended the Juilliard School. Nancy went to Europe for the summer to continue her vocal training and stayed for 12 years! She sang professionally as a lyric soprano soloist in Austria, Switzerland, and Germany. Nancy is fluent in German and has a very good ear for languages! Her years of living abroad have given her a deep understanding of Buyers and Sellers from varying cultures and traditions. This experience is a valuable tool in understanding client needs and translates into a superb skill in negotiating on behalf of her clients. The experience of living in Europe as well as recent trips to visit family in Asia, she has a deep understanding of varying architectural and decorating styles.