Benefits of Short Sale
Short selling or going short refers to the act of selling assets in form of securities that were borrowed from a broker to secure property loan. Irrespective of whether foreclose is inevitable, never consider the option of selling your property if you will not be able to settle your existing mortgage. A short sale is therefore the best alternative for you to avoid foreclosure.
1. Prevents foreclosure
A short sale is a fairly simple process, compared to selling the property for its original price and waiting years until the market recovers. Once your have a good offer, submit it at the local bank so that they put the foreclosure on hold. In most cases, lenders perceive this as the best option if there is a chance the mortgage will be cleared to avoid foreclosure.
2. Facilitates negotiations between buyer and seller
Another reason why a short sale is better than foreclosure is that the house or property can be sold for its original market value, which might be less than what your owe on the current mortgage. Therefore, the value of the house will depend on the negotiations between the lender, seller and buyer. Many investors often strive to get the lowest price, which in turn helps homeowners to sell the property at a it’s original price.
3. Credit history is not affected
Short sales and late payments will not in any way affect your credit history, and credit rating for that matter. In fact, the records often show that the mortgage was paid in full. Moreover, you can continue living in the house while you consider short selling.
4. Flexibility
When you attempt to short sale your property, there is no need to make monthly mortgage payment. Therefore this relieves the pressure of facing foreclosure as well as being pestered by the lender, and gives you an opportunity to settle your mortgage payment. Short selling your property is the best way to avoid foreclosure.
By failing to make your mortgage payments on time and the property is at risk of foreclosure, your credit rating decline and may worsen with time should the foreclosure continue.
