7 Reasons to Consider a Short Sale

(Don’t Walk Away from Your House and Allow your Mortgage Lender to Foreclose)

Got denied on Loan Modification? Mortgage loan payments too high? Property value dropped? Unable to keep up with your payments? Feeling frustrated, overwhelmed, ready to just walk away?

STOP! Before abandoning your family’s favorite best-loved house, explore all your options.

Options? Yes, you do have choices. Many homeowners, who are in default on their loans, don’t know they have options available, and one of them is short sale.

Short Sale” is a better EXIT STRATEGY for you instead of walking away.  It’s a process of selling your house before it goes to foreclosure.

Lenders actually prefer short sales. Even though they take a loss from short sales, their losses are LESS than if they went through the foreclosure process. For example, a lender may lose $30,000 with a short sale, but if the same house went through foreclosure, the bank may lose $80,000. So short selling is really to their benefit because it helps them reduce their losses.

1. Integrity. You are the homeowners – you borrowed the money and you agreed to the repayment. You want to do your best to keep up your part of the contract. Even if you can’t make the full payment and pay off your mortgage lender in full. There is a lot of satisfaction in knowing you did your best to help the lender avoid a big loss.

2. Pride & Dignity. If you hire a Realtor®, they’ll sell your house just like all the other houses in your neighborhood. Your real estate agent will put up a sign, put ads online, and hold open houses. You can tell the neighbors that you’re selling your house. You don’t have to tell them that your loan is in default. You don’t need to try to hide the foreclosure. No sheriff will come to evict you, and there’s no public record of foreclosure. You’ll still hold your head high with pride and dignity.

3. Lower Debt Discharge Income. If you think that abandoning your house and walking away will solve all your problems, THINK AGAIN! If you’re upside down and the lender has to take a loss, they may send you a 1099-C tax form at the end of the year. Their loss gets reported to the IRS as your income, and you’ll probably have to pay tax on this income. It’s to YOUR benefit to help the lender incur as SMALL a loss as possible because that means LESS TAXES for you to pay to the IRS. Are you exempt from this IRS law? Maybe or maybe not. Although a new exemption law went into effect, check with your accountant or tax professional to see if you qualify or if you’ll have to pay more taxes.

4. Better Credit Report. Let’s face it, a short sale will hurt your credit. It’ll subtract as little as 50 points from your credit score and  better reporting.  BUT a foreclosure is even worse — it subtracts about 200 points from your credit score and can stay on your report for 7 years. It’s very difficult to get credit after a foreclosure, and it’s difficult to get it removed from your credit report because it’s a public record.

5. Lender may Reward You. Some lenders actually may give cash back to the homeowners after a successful short sale — up to $45,000. They show their appreciation for your cooperation and helping them minimize their losses by short selling and preserving their asset.

6. Keep the Scammers Away. Instead of getting mixed up in a quitclaim deed scheme, do it the legit way. Let your Realtor® screen and qualify the buyers.

7. You’re in Good Hands. When you sell, you won’t be at the mercy of the lender’s foreclosure date. You’ll know when you’re moving, so there’s no need to wonder and worry. You and your family can feel secure in the hands of a Realtor®. Your professional real estate agent can deal with the lender for you. A Realtor®, who is experienced in short sales, will know what documents your lender requires to get it approved. They will help you get the correct paperwork together and submit it to the lender. Less hassle, lower stress, and positive energy for you to focus on your next home!

Be an empowered homeowner. Don’t give up the fight yet. I will help arm you with tools to avoid foreclosure. You owe it to yourself, your lender, your community and your family, so contact me to discuss your case.

Moral versus Survival….YES, you can have both!