Each year, millions of Americans struggle to keep up with their mortgage. Financial issues from the sudden death of a loved one, prolonged unemployment, and other issues can leave a homeowner overwhelmed without many options. This is around the time when homeowners start considering a short sale.
A short sale allows a homeowner to sell their home for less than they owe on their overall mortgage. If approved, a homeowner can reduce their financial burden by getting rid of the home. With the help of a real estate attorney, a short sale can be a great solution for most people, it’s not always the right solution for everyone.
Pros of Short Sales
Avoid a Foreclosure
Depending on the circumstances, people who consider a short sale do so with the interest of avoiding foreclosure. If the seller has assessed the situation and come to the conclusion that they simply won’t be able to keep up with the payments, a short sale would definitely be an advantage.
Less Credit Impact
A person’s credit can be strongly affected by a foreclosure. It’s a mark of unpaid debt that could remain on your credit report for well over 7 years. With a short sale, your credit may still be affected, but it may not be as harmful as a foreclosure.
Selling Could Be Easier
Depending on location and various real estate factors, short sales are often in a league of their own. By undercutting other homes in the area and simply offering the home at a lower price, short sales often sell quickly, barring any bank delays. In fact, short sales are often a dedicated target for investors, house “flippers”, and first-time homebuyers.
Cons of Short Sales
You’re Not In Full Control
When a house is listed for sale in the traditional way, everything from the price to the offers is on your terms. But when the house is being sold in a short sale, the bank is directly involved. The bank ultimately decides if a short sale is valid depending on the offers received; they even have the power of negotiation.
Your Credit May Be Affected
Perhaps not as badly as a foreclosure, however, a short sale is still classified as a debt that wasn’t completely paid.
It Can Take a While
Though the popularity of short sales as a bargain has increased in recent years, how quickly your home sells in a short sale largely depends on factors outside of your control. There’s the criteria of your location, rates on the market, the value of the home – all this and the skepticism of some buyers’ willingness to buy the property. Some buyers will try to lower the price to unreasonable lows that can delay and distract the selling process.
Get Your Free Consultation With Residential Real Estate Attorney Andrew Archer
If you’re facing foreclosure but looking for an alternative, a short sale may be one of the best ways for you to avoid both bankruptcy and foreclosure. The attorneys and staff at Brenner Spiller & Archer provide friendly, caring, and affordable legal services.
We serve clients throughout central and south Jersey with offices in West Berlin, Mount Holly, Vineland, and Freehold. If you need an experienced real estate attorney, call 856.963.5000 or contact us online to schedule your free consultation.
