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Benefits of Doing a Short Sale
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You will keep a full blown
foreclosure off your credit history. A Short Sale will impact
your credit much less than a foreclosure. Before and after
studies have shown that a foreclosure will lower your credit score
more than a Short Sale will lower your credit score.
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You don't have to say "Yes"
when asked on future loan applications whether "you have had a house
go to foreclosure"
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You will be
eligible, under Fannie Mae guidelines, to buy another home in 2
years instead of 5 years for a foreclosure. FHA and VA have no
published wait guidelines, and if you get your credit score back up
with a one year good pay history, you can qualify for a new loan.
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Upon a
successful short sale, we will pay for you to enroll in a credit
repair program. This will greatly reduce the time it will take
to improve your credit rating. This has a value of $500 per
person.
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We negotiate with the lender
for FULL SATISFACTION of all debts. If the house goes
all the way to foreclosure, costs continue to add up until the
lender gets the house resold. The deficiency will be much
higher than if they do a Short Sale, and the lender could pursue a
deficiency judgment against you, and they have no input.
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Working out a Short Sale may
allow you to avoid filing bankruptcy.
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No mortgage
payments to make during the process, so you can save up money for a
move.
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Retain some
dignity in knowing that you sold your home.
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You won't
suffer the social stigma of the "F" word: Foreclosure.
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Although you won't receive any
funds at closing, it won't cost you anything either. All costs
of the sale come out of the lender's proceeds.
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Typically homes sold in a Short
Sale are sold "As-Is", so you won't need to spend any money fixing
anything, unless you choose to do so.
CLICK
HERE for a comparison chart showing Foreclosure vs Short Sale
Drawbacks of Doing a Short Sale
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Waiting
for the bank to respond to an offer can be frustrating.
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The bank
will want to examine personal records such as tax returns, bank
accounts, pay stubs, assets and liabilities, in addition to
asking for a hardship letter from you.
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Accommodating prospective buyers will mean showing your house.
If you have already moved, or plan to move soon, this is not an
issue.
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There is
no assurance the bank will accept a Short Sale offer.
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As a short sale represents a loss for the lender,
they can report the amount lost as debt forgiveness to the
borrower. They could issue a 1099-C as income to the
borrower. However, the
Mortgage Debt Relief Act of 2007 allows borrowers to
exclude this income for a principal residence (Refer to IRS
Publication 4681 and IRS Tax Form 982 for more info).
It should be noted the lender can do this in a foreclosure as
well.
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If you have significant
assets, you are giving information to the lender that they might
use to try and get some of those assets.
Do the Benefits outweigh the
Drawbacks? That's for you to decide, but we think they do.
IMPORTANT NOTICE:
Plum Properties LLC, Susan Breckel, LLC Basswood Realty Services LLC and/or
any affiliated or related parties are not associated with any government
agency or program, and our company is not approved by the government or your
lender(s). Even if you accept this offer and use our service, your lender
may not agree to change your loan or approve the short sale. If you stop
paying your mortgage, you could lose your home and damage your credit
rating.
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