Florida’s unstable real estate market has created many problems from homeowners, resulting in an increase in foreclosures as many people have fallen on hard times. As an alternative to foreclosure, many mortgage holders may have another option called a short sale, which is the act of selling at a reduced price that is below the mortgage amount.
There are benefits and drawbacks when choosing a short sale.
The first thing you must know about short sales is that they can take a good deal of time. It is a process that is full of paperwork for both the buyer and the seller. This means that you must have time to spare and some patience. It will also take a good deal of work from you, as you must contact your lender and get that company to agree to a short sale. Your lawyer and real-estate agent can certainly help in this department. Your lender will also need bank statements, tax statements, payroll stubs, and many other sensitive documents; so organization is important too.
With all of this work, you may be wondering “why bother with a short sale?” The answer is… A short sale will decrease the amount of damage to your credit and allow you to move forward with a cleaner slate than a foreclosure. In other words, it will take much less time to become eligible for loans and purchases after a short sale than after a foreclosure. And if you are looking to become a homeowner again, a short sale will also reduce the amount of time before you can qualify for a mortgage again. Additionally, you will escape all of the stress of foreclosure by working with the bank rather than just abandoning the property. So keep in mind, while the sort sale will not completely save your credit, it will certainly limit the damage. If you would like to be a homeowner again in the near future, a short sale would definitely be in your best interest.
Another benefit is the possibility of forgiveness. In many cases, the lender will forgive the balance due, or deficiency, allowing you to walk away without any debt.
The final benefit to the short sale is more personal than business… you get to actually sell your home to a buyer. You get to put it on the market and meet the new owners and take offers on the house. This keeps the bank from letting the home fall into ruins or selling the property for next to nothing. Of course, you will have to show the home and go through the sales process, but it gives you the peace of mind that your beloved property will not just fall by the wayside.
In deciding to pursue a short sale, please remember that your lender may be difficult to deal with. However, it can be well worth the effort as you have more peace of mind and more closure in the process. The best way to decide is to meet with a lawyer who is well versed in the area of short sales and learn the pros and cons, as well as the trends in your local market. This will help you better understand the process and help you make an informed decision.
For more information regarding short sales in Royal Palm Beach or surrounding areas, feel free to contact us with any questions you may have.