Like many Americans today, I was affected by the economic downturn and saw the value of my home plummet.- Roberto G. , Southbridge, MA
Should You Do A Short Sale?If you need to sell your home for any reason and you are like many homeowners who owe more on their homes than they are worth, then a short sale is most likely your best solution.
Do not be misled into thinking that there needs to be some profound reason to do a short sale. There are countless reasons on why you may need to sell your home. Some of these include affordability, divorce, employment, relocation, or even the home itself.
Here are the benefits of doing a short sale versus alternatives like foreclosure, renting the home out, or not selling at all:
1) Debt Forgiveness
One of the biggest benefits of a short sale is usually getting all remaining debt forgiven. As an example, if your mortgage is $300,000 and you sell the home for $200,000, then the remaining balance of $100,000 will be forgiven by the bank, which includes closing costs, condo fees, real estate commissions, property taxes, etc . Many clients have a hard time believing that such a thing is possible or would ever be agreed to by their bank.
As irrational as your bank may seem, they do listen to dollar signs and national statistics prove that a short sale will sell for 26% more than a foreclosure. And that doesn’t even include the cost to foreclose and additional mortgage payments missed. Every single day, we are getting short sale approvals that state in writing that the balance of the mortgage is being forgiven and the debt is settled!
2) Credit Impact
The lesser impact on your credit is another benefit both short term and long term of a short sale. If you are behind on payments, the sooner you sell the sooner your credit will improve. If you are current, the impact to your credit is minimal but removing such a large debt from your credit report can be positive as well. Whether you are current on your payments or drastically behind a short sale is much better than a foreclosure. Remember, being behind on your mortgage is where the majority of the credit issues come from For more information, watch our video on how a short sale affects your credit.
3) Buying a Home Again
Another big benefit that our clients often consider is the ability to purchase a home again in as little as 2 years after doing a short sale which turns into double or triple that amount of time after a foreclosure. Just because this home has not worked out does not mean that the dream of owning again is lost forever. Plenty of our clients have already bought homes again or are planning to buy another home shortly. The lessons learned in this home, both positive and negative, can prove to be very helpful when looking to purchase again.
4) Selling With Dignity
This benefit should be higher than #4 but we never like to push some moral obligation onto our clients. Many of our clients do not want to go through the humiliation of having the bank hold an auction on the front lawn and take ownership of the property. Not to mention, having the home abandoned and winterized lends itself to frozen pipes and vandals. For some, the impact this will have on the neighborhood weighs heavy on their decision as well. There is no question that a short sale is a more dignified and responsible approach to selling a home versus a foreclosure.
The benefits of a short sale are many but the reasons to do a short sale can be summarized by asking yourself two questions:
- Do you need to sell your home?
- Do you owe more on your home than it is worth?
If you answered YES to both of these questions then you should do a short sale.Do You Qualify?
Read Short Sale Testimonials from Our Clients
My wife and I were more than 50% upside down in our home, and were nearly forced to turn down a big promotion across the country because of it. A short sale was the only way out, and no other realty company thought we would qualify, or bothered working with us.
The bottom line is we sold our home in less than 6 months, including the bank’s approval. We could not have done it without McGeough Lamacchia Realty. We are free of our mortgage and our home’s $100K negative equity. In addition, the banks approved full debt forgiveness, without a penny out of our pocket. My family and I are now living in Seattle, WA, after I was able to accept the promotion that helped our family get out of debt, and move forward with our lives.
My family and I are forever grateful for all the efforts of the entire team at McGeough Lamacchia Realty! Thank you so much.- Matthew and Michelle B., Lawrence, MA