Losing your home due to the inability to meet the monthly payment obligations is quite possibly the most devastating financial scenario you could ever face. truthfully, a foreclosure puts a huge blemish on your credit report, where recovering from it could take years. Further, the bank may file a legal case against you as part of the foreclosure process. Having gone through the foreclosure it will certainly dampen your ability to secure any kind of credit, leaving you with no credit.
Think about a Short Sale as a Better Credit Decision
The pitfalls of a foreclosure are frightening and often irreparable. Hence, any option that offers a solution to the foreclosure is a better alternative. A short sale is one option for property owners who are buried in financial turmoil. Simply put, a short sale means you sell your home at a price that is lower than the amount you owe the bank.
The best part about short sales is that they create a very good situation for everyone who is involved in the transactions:
* The seller is able to stave off foreclosure and get their loan paid off.
* The lender is able to get paid a portion of the loan back without going through all the lengthy litigation process, high legal fees, of foreclosure and marketing the repossessed property
* The buyer is able to purchase the home at a lower price.
Thinking about Doing a Short Sale? Keep the Following Factors in Mind
The first safety measure you must take when negotiating your mortgage through this process is to get a written acknowledgment from the lender, clearly stating that all your debts are forgiven. Other things to keep in mind to avoid any possible negative consequences of the process are:
* Guard your credit rating: Do not forget that a short sale is listed on your credit report. This is why you want your bank to report it in the most positive light. For example, if your credit report merely states that the loan is satisfied, your score will not be impacted. On the other hand, if your bank reports you closed out for less than the actual amount owed, your score will take a huge drop.
* Seek out good tax advice: A liability for taxes on a short sale arises when the lender claims that the debt released should be treated as an income. A tax attorney can help you make some choices to limit this liability.
While a short sale is certainly a smarter choice to going through foreclosure on several grounds, a borrower often has a hard time trying to convince the lender to agree to them right away. This is because the lender has to accept to give up a part of the mortgage claim that they want to recover. Therefore, when faced with a tight financial situation, a short sale must be pursued as soon as possible. The longer you put it off, the larger the amount of arrears, and the less likely that the bank will be to accept the process. With that said, I have seen homeowners stay in their homes for many months without making their mortgages and still complete the transaction. Of course this is a bit risky and I would never recommend this strategy to a client.
If you, or someone you know, is facing a foreclosure situation you will want to have an experienced Realtor help you in exploring your choices. Certified short sale specialist and Scottsdale AZ Real Estate agent Jen Wehner has been the #1 producer for people who want to avoid foreclosure in the State of Arizona for all Prudential real estate brokerages. There is no fee to talk to Jen and you can get advice on what the best choice is for you. Having an expert work with you could shield you, your house, and your financial future.
Think about a Short Sale as a Better Credit Decision
The pitfalls of a foreclosure are frightening and often irreparable. Hence, any option that offers a solution to the foreclosure is a better alternative. A short sale is one option for property owners who are buried in financial turmoil. Simply put, a short sale means you sell your home at a price that is lower than the amount you owe the bank.
The best part about short sales is that they create a very good situation for everyone who is involved in the transactions:
* The seller is able to stave off foreclosure and get their loan paid off.
* The lender is able to get paid a portion of the loan back without going through all the lengthy litigation process, high legal fees, of foreclosure and marketing the repossessed property
* The buyer is able to purchase the home at a lower price.
Thinking about Doing a Short Sale? Keep the Following Factors in Mind
The first safety measure you must take when negotiating your mortgage through this process is to get a written acknowledgment from the lender, clearly stating that all your debts are forgiven. Other things to keep in mind to avoid any possible negative consequences of the process are:
* Guard your credit rating: Do not forget that a short sale is listed on your credit report. This is why you want your bank to report it in the most positive light. For example, if your credit report merely states that the loan is satisfied, your score will not be impacted. On the other hand, if your bank reports you closed out for less than the actual amount owed, your score will take a huge drop.
* Seek out good tax advice: A liability for taxes on a short sale arises when the lender claims that the debt released should be treated as an income. A tax attorney can help you make some choices to limit this liability.
While a short sale is certainly a smarter choice to going through foreclosure on several grounds, a borrower often has a hard time trying to convince the lender to agree to them right away. This is because the lender has to accept to give up a part of the mortgage claim that they want to recover. Therefore, when faced with a tight financial situation, a short sale must be pursued as soon as possible. The longer you put it off, the larger the amount of arrears, and the less likely that the bank will be to accept the process. With that said, I have seen homeowners stay in their homes for many months without making their mortgages and still complete the transaction. Of course this is a bit risky and I would never recommend this strategy to a client.
If you, or someone you know, is facing a foreclosure situation you will want to have an experienced Realtor help you in exploring your choices. Certified short sale specialist and Scottsdale AZ Real Estate agent Jen Wehner has been the #1 producer for people who want to avoid foreclosure in the State of Arizona for all Prudential real estate brokerages. There is no fee to talk to Jen and you can get advice on what the best choice is for you. Having an expert work with you could shield you, your house, and your financial future.
About the Author:
Jen Wehner is an award winning Realtor based in Scottsdale Arizona. If you would like to learn more about buying or selling homes in Arizona, click here SCOTTSDALE REAL ESTATE or you can visit Jen's personal blog here ARIZONA REALTORS