What is a short sale and how does it benefit you here in Sacramento?
In this article we’ll dive into that question so you as a Sacramento homeowner can tell what your options are during foreclosure and to see if a short sale would benefit you.
What is a Short Sale and How Does it Benefit You?
A short sale can be a smart way to mitigate foreclosure (here’s a great definition of what a foreclosure is in case you’re not sure) on a mortgage, although they can be difficult to attain in today’s market, they often prove to be a simpler way to resolve any debt left over from a loan.
A few years ago, short sales were a common occurrence in the real estate market, especially when the Sacramento area was hit by a surge of foreclosures. However, as the foreclosure rates have slowed down and home values have started to recover, lenders have become less inclined to offer short sales as a viable option to homeowners. Despite this shift, it’s important to note that short sales are still being conducted at a high frequency.
The reason for the decline in the number of short sales can be attributed to the improvement in the housing market. As home values have risen, lenders have become more confident in their ability to sell foreclosed properties for a fair price, reducing their reliance on short sales as a solution. Additionally, with the decline in foreclosures, there is simply less demand for short sales.
However, it’s important to understand that short sales are still a viable option for homeowners who are struggling to keep up with their mortgage payments. While lenders may be more hesitant to offer a short sale, they are still often willing to consider them in certain situations. For example, if a homeowner is facing a financial hardship and cannot afford to continue making mortgage payments, a lender may be willing to negotiate a short sale in order to minimize their losses.
Here are a few reasons you may want to consider short sale on your Sacramento home
You Avoid Foreclosure And The Harmful Effects Of It
The best benefit of short sale is that you avoid a foreclosure on your home. Your mortgage lender accepts less than what is owed on your mortgage, leaving you without the debt that you cannot afford.
Foreclosure can lead to all kinds of financial problems, starting with the inability to obtain a new loan for a home because a foreclosure stays on your credit record usually for up to 7 years.
Even renting will become more difficult as your credit score would be affected, and you often have to disclose a foreclosure on a rental application. Foreclosures can also last a long time (up to 7 years as mentioned above), making you wait years to even qualify for a new mortgage.
Credit Worries
Foreclosure can have a significant impact on your credit and financial standing, and the ramifications can last for years. If you have a foreclosure on your record, it can make it difficult, if not impossible, to secure a car loan or a rental property through traditional banking channels. Additionally, if you work in a field that requires a good credit score, such as finance or banking, a foreclosure could even result in termination of employment.
In contrast, a short sale provides a more favorable outcome for both the bank and the seller. By completing a short sale, the remaining debt on the mortgage is relieved, allowing both parties to move forward. Furthermore, a short sale is easier on your credit score than a foreclosure, and will only show up on your credit report as a pre-foreclosure status, which minimizes the damage to your credit compared to a full-blown foreclosure.
Overall, a short sale can offer a way for a homeowner to regain financial stability and rebuild their credit in the long run. By reducing the impact on their credit score, a homeowner has a better chance of recovering and securing loans and credit in the future. If you’re facing financial difficulties and struggling to keep up with your mortgage payments, a short sale may be a viable option to consider.
Buying a New House
A foreclosure can last for a long time, making it impossible to purchase a mortgage again for up to 7 years.
Short sales offer a little more flexibility for the seller, allowing new home applications only 2 years after the filing depending on the bank. It also makes a mortgage lender more likely to approve your loan than if you had a full foreclosure, getting you back into a home faster.
Again, this all depends on the actual bank / lender you’re working with… so if they’re giving you a hard time a year or two after a short sale… shop around and find another bank to work with.
Usually No Fees Involved
Short sale can offer a fee-free alternative to foreclosure. Banks may agree to a short sale when your property is underwater and at risk of abandonment, avoiding the additional fees that come with a foreclosure. Note that some real estate consultants may charge a fee for facilitating the process, so it’s advisable to verify the terms with them before seeking assistance from an agent or firm.
Our company, North Valley Home Buyers, may be able to guide you in the right direction on how to give yourself the best shot at a bank approving a short sale with your Sacramento area house… so connect with us by calling (916) 500-7355 or shoot an email to us through our contact page here.
Getting a Short Sale – What You May Need To Provide
You will have to provide the bank with proof of being unable to pay your mortgage payments. This can be difficult and is best resolved by finding a good real estate attorney in your area that has experience dealing in this type of law.
If you don’t know who to contact or where to turn to see if a short sale may be a good option for you… get a hold of us.
We won’t charge a thing to discuss your situation with you and let you know your options.
And we can even give you guidance and pointers at absolutely no cost or obligation.
Sometimes we’re actually able to do the work for you or even buy the house from you to get you out from under that mortgage… so that may be a viable option for you.
We buy Sacramento houses and we work with home sellers like yourself who are having troubles getting out of your house the traditional way… or who can’t (or don’t want to) go the usual route of listing with an agent.
Get a hold of us anytime to discuss your situation. We’re here for you!
Or, if you want to see what we can offer on your house… click the link below and fill out the form on the next page. We’ll make a no-obligation cash offer to you within 24 hours. At least that way you know whether that is an option for you or not.