While short sales don’t really have a good reputation, they do offer several financial benefits, especially if you’re underwater on the property you’re planning to sell.
A short sale can help you avoid the effects of a bad investment and give you a fresh start. Here are a few key advantages of short selling a property:
It helps you avoid foreclosure
If you’re facing a difficult situation that feels impossible to get out of, be prepared for the likelihood of losing your property. A short sale for your property is better for your financial future compared to losing it due to foreclosure. While both of these will still reflect on your credit report for seven years, a foreclosure has a greater negative impact on your credit score and interest rates.
Better possibility of your bank forgiving your debt
With short sales, banks get less from a new buyer compared to how much you owe them on your loan. Since you’ll be responsible for paying the remaining amount owed, you can try negotiating with your lender for a written release of liability. With this, a deficiency judgment cannot be pursued against you for what your lender received from the short sale and the actual amount you owe.
Easier to apply for a new loan
Successfully obtaining a loan for a new property will still be difficult after you’ve completed a short sale. However, lenders will be much more lenient towards someone with a short sale in their credit history compared to someone who has lost a property to foreclosure. While lenders have different standards, a foreclosure can affect your ability to get approved for a mortgage for five to seven years following a foreclosure.
Planning to sell your property in Phoenix, Old Town Scottsdale, Arcadia, and other nearby communities? Get in touch with Scott Semer today at 480.353.0299, or send an email to firstname.lastname@example.org