July 2012 – In real estate, short sales are a part of our day to day business. The lender requirements, rules and regulations, REALTORS® need to stay educated to be able to help our clients through the process. However, the true reality of a short sale is that it more about helping a family regain stability than about dotting i’s and crossing t’s. We read this article from the KCM Crew this week and it has some great points about why a short sale can be a much better choice for a family than going through a foreclosure.
Short sales let you leave your home with dignity.
In many ways, a short sale proceeds exactly as a regular home sale. You will know who is buying your home, you will have a closing date and be able to prepare your family to move. You will have the time to find a place to go. This is not always the case in a foreclosure. When your home is foreclosed upon, an official will come and eventually force you to leave. You may not know exactly when that moment is coming and it is an upsetting moment that can be avoided.
A short sale may save you money in the future.
In many sales labelled “distressed sales”, a lender has the option of requiring you to pay the difference between the loan amount and the sale price. With proper representation in a short sale, most banks will release you from further obligation.
A short sale has less impact on your credit.
When your short sale is over, your credit starts to recover. In New Jersey, a foreclosure can take years, while a short sale can take fewer than six months. Think of how much faster your family can recover by avoiding foreclosure.
You can buy a home again. Faster.
After a foreclosure, it may be 5 to 7 years before you can qualify for a mortgage. With a short sale that timeframe is 3 to 4 years.
Tax relief isn’t guaranteed to stick around.
The Mortgage Forgiveness Relief Act of 2007, which protects homeowners who receive debt forgiveness for their primary residence against paying taxes on the amount forgiven is set to expire at the end of 2012.
If you think you are headed toward foreclosure, get advice you can trust before it is too late. We’re here to answer your questions.