Short sales sound frightening and have gained a bad reputation over the past few years, but more than 2.2 million short sales have taken place in the United States since 2008. But what is a short sale and could it be the right option for you?
What is a short sale?
If your home will sell for less than what you owe on it, your mortgage lender may agree to release the lien and accept less than the amount owed. This is, in essence, a short sale. Sometimes a short sale is used as an alternative to foreclosure.
Is a short sale right for me?
Every situation is unique and we specialize in short sales, so contact us any time with questions. But if you’re struggling to make mortgage payments or if you need to move out of your home (due to employment relocation, for example), a short sale may be right for you.
Some of the advantages of a short sale include:
* No effect on credit history and the potential for a nominal and brief effect on your credit score. Short sales are not reported on credit history and, if your mortgage is reported as paid or negotiated, your credit score may be lowered as little as 50 points and may only have an effect for 12 to 18 months.
* No effect on current or future employment. Short sales are not reported on credit reports and are not a challenge to employment.
* Depending on the lender, a homeowner who has successfully negotiated and closed a short sale may be eligible for a mortgage in as few as two years.
* In a properly managed short sale, the home is sold at a price that should be close to market value and, in almost all cases, is better than an REO sale. This may result in a lower deficiency judgment or even none at all.
And if you’re considering a short sale, consider this — U.S. home prices jumped 10.9 percent in March 2013, so your home may be worth more than you think. Contact Max or Kolleen to find out more and to see if a short sale will work for you.