benefits of short sale

The Seller’s Short Sale Transaction: Avoiding Foreclosure

You know what? It brings me into a dark and melancholy place to write about short sales, foreclosure, an unhealthy real estate market, and all the people and things that are affected by it all. As unpleasant as it is for me to simply write about it though, I have no idea how to multiply the darkness to get a sense of the stress it wreaks on the folks going through it. Facing the possibility of losing your home can carry with it some heavy emotions and distractions. Don’t let those things defeat you.  You have an option called a short sale that could turn things around for you, but it takes focus, patience, and work. If you truly are unable to make your monthly mortgage payments and you see foreclosure in your future, a short sale could be a good solution for you AND your mortgage holder.

Homeowner Short Sale Benefits vs. Foreclosure

You can’t make your house payment and have gotten to far behind to catch up – so you are looking at something like this … After 3 to 6 missed payments, you are already considered to have begun the foreclosure process and you will receive a notice of default. In 6 to 12 months you will receive a notice of eviction giving you 30 days to vacate the premises. You will have a foreclosure on your credit report and be unable to purchase another house for 5 to 7 years and THEN only if you raise and maintain the acceptable credit score of the day.

There are a lot of question marks and gray areas in that foreclosure time line. Every case is a little different and not only are you living with the stress of not knowing exactly what is going on and how long you have to try and make things right or find other housing, but you will be dealing with phone calls, letters, and legal notices that further burden you and prevent you from focusing on rebuilding your life. This is where the short sale offers some relief.

First of all, in addition to the embarrassment associated with losing your home, there is a degree of integrity that drives people to make things right. I don’t condone walking away from your mortgage obligation, but I do have to bring attention to the obligations to self and to family.  Forget about how a person gets in this position… once he’s there, his income is reduced, and his house is suddenly worth less than he paid for it… what can he do? How “honorable” is it to continue paying from a savings account that will eventually be empty,  leaving the homeowner with a foreclosure anyway? With no means to move on rebuild his life? Lose-lose!

A short sale offers the opportunity to honor your financial obligation and feel good about being proactive in the process to make things right, as opposed to ducking phone calls and ignoring scary foreclosure documents that come in the mail.  Instead of a year or two of question marks and worry associated with the foreclosure time line, your short sale experience involves living your life, keeping your house tidy, and showing it to potential buyers – just like a regular for sale scenario. When it’s all said and done you will not have a foreclosure on your credit report, your credit score will have dropped about 100 points (about a third of a foreclosure’s penalty) and an ability to buy when you get your score back up.  Less stress, less penalty, and less embarrassment knowing you worked with your lender to fulfill your obligations, rather than simply walking away from them.

The short sale process has been a bit of a mystery and it has been tough to advise distressed home owners whether or not it was a good option. Having observed it for a while now there is one thing we know for sure – In a case of real hardship, a short sale transaction is a good option to deal with your mortgage situation and put you on the fast track to rebuilding and ENJOYING your life again.  Read here to find out how to get started.