Short Sale Over Foreclosure
Why does a short sale make sense over a foreclosure?
If you have financial distress, many wonder if a short sale is a good option. Considering whether a short sale vs a foreclosure is important. When you are unable to make your mortgage payments, taking action is critical. The worst thing you can do is nothing. Addressing the situation will help you minimize the impact to you long term. So there are 2 options to consider: foreclosure and short sale.
So what is a short sale? A short sale is an agreement between the mortgage lender to sell the property for less than is owed (in order to avoid foreclosure and save financial loss).
A foreclosure means the property is currently being repossessed due to the owner's inability to keep up with mortgage payments.
Is a Short Sale or a Foreclosure Better?
Anything that allows you to get back to financial stability is better. We would say that a short sale is the better option. Some people decide to just let the bank foreclose on their distressed home. This could be a long term issue. There could be long term consequences going into foreclosure, your credit will hit bottom and you won't be able to buy a house for years. A short sale isn't exactly the opposite, but it has less of an impact on your life.
Benefits of a Short Sale
1. Protects Your Credit -- A short sale will hurt your credit rating, but not as much as a foreclosure will. Additionally it will impact it for less. When your lender agrees to accept less, a short sale can be done. It allows you to close on your home and move on from the stress.
2. It Saves You Money -- The U.S. Congress Joint Economic Committee recently reported the average cost for a homeowner going through foreclosure is $7,500 (not including additional costs). When money is already tight, this could further deepen your financial hole. You could even go into bankruptcy, which will damage your life even more. A short sale can help you recoup some of your loss from the sale of your house.
3. You Have Control -- If you go into foreclosure, there is one thing working against you: Uncertainty. You will not know when you house will be sold or when you have to immediately pack your bags and move out. The fear of not knowing can dramatically affect your mental state, and even distress your family relationship. It's better to have some form of control over your home and life, which is what short selling provides you. By short selling, you get to play a more active role in the sale of your home.
The Peace of Mind
You deserve to have a great night's sleep. Imagine all of the financial stress behind you. Stress often impacts everything so that alone is the reason to get the debt behind you. Foreclosure leaves a cloud of uncertainty over your head for a long time, and on top of that your lender might take legal action against you. The piling of bills, stress from lenders, and uncertainty will hardly let you sleep soundly. A short sale creates more of a peace of mind for the homeowner because they have control over certain factors. They know when they'll have to move out. They are working with their lender instead of against them. And there's less burden.
All listings featuring the BMLS logo are provided by Beaches MLS Inc. Copyright 2017 Beaches MLS. This information is not verified for authenticity or accuracy and is not guaranteed.
© 2017 Beaches Multiple Listing Service, Inc. All rights reserved.
Listing information last updated on September 25th, 2017 at 2:52pm EDT.