Most people in danger of losing their home or simply struggling to keep up on payments every month first turn to the concept of a loan modification. However, that program is not for everyone. Many people simply don’t qualify and can’t afford their home even with a modification.
That’s where a short sale becomes the most viable option. But what is a short sale and how does it solve a loan repayment problem?
Simply put, a short sale is the process of selling one’s home for less than what is owed on the mortgage. If you can’t keep your home and you want to avoid the public procedure of a foreclosure, this is the best way to go.
The benefits look something like this:
- You are free of a huge debt that you probably were unable to ever pay back.
- You avoid the foreclosure process which is in the public domain
- Supposedly, your credit takes less of a hit than with a foreclosure
- You get to start over! You have to admit, a home loan that is more than the home is worth by a significant amount is stressful. Just having it over with will lift a huge weight from your daily life.
The process of completing a short sale is not simple. It takes time – a lot of it in most cases. The bank wants to avoid the foreclosure process above all else so they will be on board with a reasonable short sale request. But the amount you sell the home for short of what you owe will be intensely reviewed and all sales must be approved by the bank before the transaction can go through.
This means you and a buyer may fully agree to a sale only to have the bank step in and reject it. Select a real estate agent that is well-versed in the short sale market to help you during this process. They should have also have someone who can handle negotiations with the bank.
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