When nearing the end of a home foreclosure case, a short sale can be a great option for homeowners seeking relief. Here’s why:
- No debt on your underwater home.
Many homes remain underwater. Homeowners owe more than the value of the property. Although property values are slowly bouncing back, it is unlikely that severely underwater homes will recover equity. It’s impossible to refinance the loans because the property is underwater.
Enter the short sale. Short sales are deals made with the lender. The lender agrees to waive the “short” amount, allowing the homeowner to sell to a third party. This is a particularly valuable tool for individuals facing foreclosure. A short sale can slow down the timeframe on your case while protecting you from a personal judgment. The bank must ultimately agree to the sale price, closing costs, and other expenses related to selling the property. You cannot sell to a family member.
- Peace of mind.
Even if you aren’t facing foreclosure, a short sale can provide peace of mind. If your home is underwater, then you may be able to sell it. This allows you to find a new, affordable home. If you are facing foreclosure, then a short sale allows you more certainty. Instead of predicting time frames based on the progress of the case, you can plan a move-out date. Certainty is a huge benefit.
- Other incentives.
In some situations, there may be other incentives provided by the bank. Although some federal programs have lapsed, some banks will provide a small cash incentive to a homeowner for doing a short sale. This isn’t a guarantee, but if offered, it can help offset moving costs.
