The starting point why people do short sale their property

7 Jun

Wikipedia defined short sale as a sale of real estate in which the proceeds from selling the property will fall short of the balance of the debts secured by liens against the property and the property owner can’t afford to repay the liens’ full amounts. Additionally this short sale occurs when a property is old and the lender agrees to accept a discounted payoff, it means that the home seller gets their lender to agree to let their property for a sales price that is less than what is owed on the mortgage.

Possible effects of short sale

Generally speaking, short sales are preferably alternative to foreclosure but the process still weighs in both lender and property owner.

–          The home owner will penalized for not fulfilling mortgage obligation payment and possibly lead a drop in credit score. In terms of credit score, the negative impact of a short sale is not that much as compare to foreclosure. Moreover doing short sale is believe to be faster and less expensive than foreclosure, but before taking action it is advisable to take help from real estate agents or attorney in negotiation.

Common causes why people do short sale their property

Let us see the list of common reasons why people are engage in short sale situation, let us what are the major reasons to qualify for a short sale.

–          Job loss

–          Business failure

–          Mortgage payment adjustment/increase

–          Reduced income

–          Relocation to another place

–          Mortgage fraud

As you can see on the list, many of these common causes can happen on us anytime and maybe we, our neighbors or
friends might experienced this situation and for sure it has an indirect impact on your side. But then again don’t look short sale as downfall option, besides there are still valid reasons why it is your best option most especially in saving your credibility. Below is the list of reasons why you short sale can still your best option to take on.

–          Saves your credit. Yes it is true that it can affect your credit score but it is less threatening than a foreclosure. Also there is a possibility that having a good negotiator will help you regain positively reputation on your credit score by negotiating to the lender to have a positive report to credit bureaus.

–          Buy a home quicker. I’m sure you don’t want to wait for a long period of time after foreclosure in your property occurs. To avoid this situation, you can do short sale and limit the pending time of approval for the process of buying another property usually as little as two years. So this will save you putting much money towards rent.

–          Reduced stress and have a piece of mind. Knowing your property foreclosed is really stressful. You might not sleep well at night thinking that you might loss everything. But with a short sale, you know that you did your best to save the property, you limit the loss of your lender by finding a new buyer and the best of all is that you have a piece of mind to start a new beginning.

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One Response to “The starting point why people do short sale their property”

  1. tan June 8, 2012 at 10:06 am #

    Good review about short sale and how it often people are engage in this kind of situation. I agree that short sale is still the best option in times of trouble, it is much better than foreclosure, besides it can save your credit report and probably start again without waiting too much time.

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