We cannot deny the fact that at some points in our life we are subjected to a financial crisis. This can be attributed to one or more of the following: job loss, disability, long term medical issues, bankruptcy, and divorce. Because of these unfortunate events, people are in the danger of getting their homes foreclosed. Foreclosure can have a demoralizing effect on someone’s credit score that is why most people are warming up to the idea of short sale.
A short sale happens when a person no longer has the capacity to pay the outstanding mortgages on the property because of the reasons mentioned above. Short sale allows the homeowner to pay the outstanding mortgages for less than the amount he owed. There is even a possibility that the homeowner will only pay the primary mortgage under its original terms. Although there is still a short sale penalty, its impact on the credit score is not as bad compared to foreclosure because short sale process takes less time to complete.
Short sale is preferred by both homeowners and lenders because of its apparent benefits. For lenders, they will have a possibility of getting financial gains by putting the property in the market and have the chance to draw prospective buyers than by actually foreclosing the property. It has been said that foreclosure fees can range from $50,000 to $70,000. Homeowners prefer short sale for obvious reason; that is to avoid the negative impact of foreclosure in their credit score.
So how do short sales works? Homeowners who are considering short sale should evaluate the property in question. It is advisable for parties involved, seller and buyer, to keep the process in the shortest time possible otherwise all will lose faith in the system. Homeowner or seller will coordinate with the lender and discuss the possibility of a short sale. Lender may ask pertinent documents to gauge whether short sale is the only way out. Such documents may include financial statement, letter of intent, tax returns papers, and pay slips.
If you need assistance with the short sale process, contact Lucas Properties LLC for more details. They are experienced in the short sale process and will work out the best deal for you,the bank and the buyer.