- What is a Short Sale
- Foreclosure vs
Short Sale - Which Path is Right for You
What is a Short Sale?
A short sale is when a lending institution accepts a discounted payoff amount on an existing mortgage and agrees to help the homeowner with closing costs to prevent a home from going into foreclosure. Often times a homeowner owes more than can be collected through the sale of the home. In this case, a short sale allows them to sell the property to avoid foreclosure for themselves and the lender. The lender typically gives consideration to a short sale when the homeowner experiences hardships like:
• Unemployment
• Divorce
• Medical challenges
• Death of a spouse
• Property depreciation due to no fault of the homeowner
Short sales are uniquely beneficial to all parties involved: homeowners, lenders, real estate agents and investors alike. By accepting a short sale, the lender decreases their potential for loss and reduces the time to receive payment by a number of months. A short sale also minimizes the costs associated with foreclosures by the lender. Homeowners avoid further damage to their financial record while buyers benefit from a good deal on their newly-purchased property. Real estate agents are compensated for their work to get the property sold and investors, when involved, can receive an increased payback on their investment by making improvements to the home and later selling it at a price that matches its increased value.
The key to the short sale process is timing.
When a homeowner fears foreclosure is even a possibility, they must contact Cabrey Lane Properties as soon as possible. Foreclosure proceedings typically start with a formal demand for payment in the form of a Notice of Default letter. Although timing of this notice varies by state, the lender typically issues it when the homeowner is three months delinquent on mortgage payments.
Ideally, Cabrey Lane should be contacted before or after one payment is missed and you have no means to make subsequent payments. Cabrey Lane can quickly assess your situation and see how the short sale process can be put to work for you. Cabrey Lane can help you avoid a foreclosure on your credit record and get you back on track to financial freedom.
Please call us at 800.869.6095 or complete our home short sale information request here.
Of all available options, foreclosure is the worst.
The inevitable result of a foreclosure is the lender taking your house. Not only will you lose your house, but the lender can get a judgment against you for the arrearages you owe plus his costs for the foreclosure action. If that isn’t enough, your credit report will be in terminal condition for many years to come, worsening an already bad financial situation and making it very difficult to obtain any other kind of credit. There is no upside to foreclosure. It should be avoided at all costs.
Consider a short sale when foreclosure seems inevitable.
A short sale is a popular option for homeowners mired down with financial problems. In this case, you would sell your home for less than what you owe your lender; the biggest problem you will face is getting your lender to agree to a short sale. In some situations, they will not. Experts advise pursuing this option the minute you realize that you are falling behind in your payments and most likely won’t be able to catch up. The longer you wait and the greater the amount you are in arrears, the less likely it becomes that your lender will even be willing to discuss a short sale.
Short Sales have disadvantages too
While a short sale will save you from foreclosure, it will also have a negative effect on your credit score. This can be overcome more quickly than the black mark of a foreclosure, especially if you manage to retain one or two credit cards and keep them current. Perhaps equally distressing, the Internal Revenue Service frequently deemed the difference between the mortgage balance and the amount realized from the short sale to be taxable as income despite the fact that the debtor never saw a dime of it. There is federal legislation called the Mortgage Forgiveness Debt Relief Act 0f 2007 that just went into effect on January 1st, 2008 and is in effect into 2012. The act essentially eliminates this problem for now.
Almost any option is better than foreclosure
Simply stated, do everything you can before foreclosure occurs and do it as quickly as humanly possible. Don’t sit back and keep thinking, “What can I do?” Instead, consider that short sale and check with your lender before your options become more and more limited.
The One Best Tip We Can Give You: Don’t Do This Alone
Don’t just get any real estate agent to help you! Make sure they have lots of short sale experience, it makes all the difference. He or She should know who to talk to, when to talk to them, and how to handle all the paperwork to get the deal done so you can move on with your life.
You Need An Experienced Short Sale Agent!
You need a Cabrey Lane Properties agent to help give you the options for your unique situation. Call us today or fill out the Short Sale request form here.
A short sale is when a lending institution accepts a discounted payoff amount on an existing mortgage and agrees to help the homeowner with closing costs to prevent a home from going into foreclosure. Often times a homeowner owes more than can be collected through the sale of the home. In this case, a short sale allows them to sell the property to avoid foreclosure for themselves and the lender. The lender typically gives consideration to a short sale when the homeowner experiences hardships like:
• Unemployment
• Divorce
• Medical challenges
• Death of a spouse
• Property depreciation due to no fault of the homeowner
Short sales are uniquely beneficial to all parties involved: homeowners, lenders, real estate agents and investors alike. By accepting a short sale, the lender decreases their potential for loss and reduces the time to receive payment by a number of months. A short sale also minimizes the costs associated with foreclosures by the lender. Homeowners avoid further damage to their financial record while buyers benefit from a good deal on their newly-purchased property. Real estate agents are compensated for their work to get the property sold and investors, when involved, can receive an increased payback on their investment by making improvements to the home and later selling it at a price that matches its increased value.
The key to the short sale process is timing.
When a homeowner fears foreclosure is even a possibility, they must contact Cabrey Lane Properties as soon as possible. Foreclosure proceedings typically start with a formal demand for payment in the form of a Notice of Default letter. Although timing of this notice varies by state, the lender typically issues it when the homeowner is three months delinquent on mortgage payments.
Ideally, Cabrey Lane should be contacted before or after one payment is missed and you have no means to make subsequent payments. Cabrey Lane can quickly assess your situation and see how the short sale process can be put to work for you. Cabrey Lane can help you avoid a foreclosure on your credit record and get you back on track to financial freedom.
Please call us at 800.869.6095 or complete our home short sale information request here.
Of all available options, foreclosure is the worst.The inevitable result of a foreclosure is the lender taking your house. Not only will you lose your house, but the lender can get a judgment against you for the arrearages you owe plus his costs for the foreclosure action. If that isn’t enough, your credit report will be in terminal condition for many years to come, worsening an already bad financial situation and making it very difficult to obtain any other kind of credit. There is no upside to foreclosure. It should be avoided at all costs.
Consider a short sale when foreclosure seems inevitable.
A short sale is a popular option for homeowners mired down with financial problems. In this case, you would sell your home for less than what you owe your lender; the biggest problem you will face is getting your lender to agree to a short sale. In some situations, they will not. Experts advise pursuing this option the minute you realize that you are falling behind in your payments and most likely won’t be able to catch up. The longer you wait and the greater the amount you are in arrears, the less likely it becomes that your lender will even be willing to discuss a short sale.
Short Sales have disadvantages too
While a short sale will save you from foreclosure, it will also have a negative effect on your credit score. This can be overcome more quickly than the black mark of a foreclosure, especially if you manage to retain one or two credit cards and keep them current. Perhaps equally distressing, the Internal Revenue Service frequently deemed the difference between the mortgage balance and the amount realized from the short sale to be taxable as income despite the fact that the debtor never saw a dime of it. There is federal legislation called the Mortgage Forgiveness Debt Relief Act 0f 2007 that just went into effect on January 1st, 2008 and is in effect into 2012. The act essentially eliminates this problem for now.
Almost any option is better than foreclosure
Simply stated, do everything you can before foreclosure occurs and do it as quickly as humanly possible. Don’t sit back and keep thinking, “What can I do?” Instead, consider that short sale and check with your lender before your options become more and more limited.
The One Best Tip We Can Give You: Don’t Do This Alone
Don’t just get any real estate agent to help you! Make sure they have lots of short sale experience, it makes all the difference. He or She should know who to talk to, when to talk to them, and how to handle all the paperwork to get the deal done so you can move on with your life.
You Need An Experienced Short Sale Agent!
You need a Cabrey Lane Properties agent to help give you the options for your unique situation. Call us today or fill out the Short Sale request form here.