The Great Recession of 2008 led to the popularity of short sales as so many homeowners were unable to make their mortgage payments. While the economy inevitably rebounded, financial crises on a global and individual scale can occur at any time. This is why short sales are so valuable, as they can help homeowners sell their homes without causing major financial issues. Below you will find a short sale guide for buyers and sellers.
Short Sale Guide for Buyers and Sellers
A short sale is a helpful option for homeowners who can no longer pay their mortgage. It is often referred to as a pre-foreclosure sale. This is because it allows homeowners to work with their lenders to sell their home and get out from under their mortgage. This is a great way to escape foreclosure and reduce the potential financial damage a foreclosure may cause.
Simply put, a short sale occurs when a homeowner sells their property for less than the amount they owe to their lender. A short sale involves the original homeowner, their lender, and an entirely new buyer. The money the new buyer pays for the home goes directly to the lender. From there, the lender has two options when it comes to the remaining amount owed on the home by the original homeowner. First, they can forgive the remaining balance the homeowner owes, and both parties can go their separate ways. However, they can also file a deficiency judgement. This requires that the homeowner pay the lender some or all of the difference.
Short Sales and Sellers
For sellers, there are major benefits to a short sale. A short sale has a significantly lower impact on your financial future as compared to a foreclosure. This is helpful if you plan on buying another home as you won’t have to wait like you would if you have a foreclosure on your record. A foreclosure is a negative mark on your credit report that lasts for 7 years. While you may have some challenges securing a mortgage, it will be much easier than if you had a foreclosure.
In addition to the financial benefits, you can also stay in your home while it is being sold during a short sale. This can be helpful as a foreclosure can cause so much emotional turmoil and issues with finding a place to stay during the process. You can also save some money through a short sale. How? The fees and charges are often paid by the lender based on a short sale agreement. For sellers, a short sale is a helpful alternative to a foreclosure.
Short Sales and Buyers
For anyone interested in flipping homes or even buying their first home, short sales are a great way to get a good price on a home. This is because sellers are motivated to sell their home in an effort to avoid foreclosure. Buyers can often get a great deal through a short sale due to the urgency necessary to avoid losing their home entirely.
In addition to seller motivation, there is also less competition among the wide swath of home buyers. This is because some buyers are not willing to deal with the short sale process. The short sale process can be slightly more complex. The timeline may not be as rigid as a regular sale. Still, this is often offset by the major discount of buying a home via a short sale. Overall, patient and interested buyers can benefit from the short sale process due to its unique advantages.
Foreclosure Prevention in Los Angeles
Apex Resolution is focused on foreclosure prevention in Los Angeles as they are leaders in short sale negotiations. They are equipped with the industry know-how to provide short sale help for realtors. With the volatility of the current housing market, short sales will likely increase. Contact Apex Resolution today as they are a valued resource for both homeowners and agents!