You May Have Options
Foreclosure can feel overwhelming, but it is not always the only path. A short sale may provide a way to sell the property, work with the lender, and reduce the long-term impact.
What is a Short Sale?
A short sale may allow a homeowner to sell the property for less than the mortgage balance, with lender approval, as an alternative to foreclosure.
A short sale occurs when a lending institution agrees to accept less than the full mortgage balance as part of an approved sale. This can sometimes allow the homeowner to sell the property and avoid a completed foreclosure.
Often, a homeowner may owe more on the mortgage than the property can realistically sell for. In that situation, a short sale may provide a way to sell the home with lender approval while reducing the damage caused by foreclosure.
Still Have Questions?
Need Help Now?
If you are facing foreclosure or falling behind on payments, Realty1One can help you review possible next steps.
Key Takeaways
A short sale may help avoid foreclosure.
Lender approval is required.
Acting early may preserve more options.
Realty1One can help explain the process.
Why a Lender Might Agree to a Short Sale
Lenders often prefer to avoid foreclosure when another workable option is available.
When a bank forecloses on a home it becomes what is known as a non-performing loan. Multiple non-performing loans affects the amount of money a bank can borrow from the Federal Reserve. Since banks only make money by borrowing from the Fed and lending to the public, they desire to borrow as much as they can. Every non-performing loan reduces the amount the bank can lend to the public, affecting their bottom line profits.
If a foreclosed property goes to auction, the sale may not produce enough to satisfy all mortgage holders. A second mortgage holder, if one exists, may receive little or nothing.
For the bank, a short sale creates a win-win situation for everyone involved. The bank gets some money, but more importantly they keep a non-performing loan off their books. The homeowner avoids foreclosure and saves his credit.
How Realty1One Can Help
Find A Buyer Quickly
Find a Buyer Quickly
Help market the property on an accelerated schedule.
Work With Lender
Work With the Lender
Help pursue terms that may reduce long-term damage.
Guide the Next Step
Guide the Next Step
Help the homeowner understand available options.
Conducting a short sale is the best way for a homeowner to get back on a positive financial path.
We locate a buyer for the home on an accelerated schedule and work to close the sale as quickly as possible. Because of our experience in helping homeowners just like you avoid foreclosure, we can obtain favorable terms from your lender and help minimize any tax liability and long-term credit impact.
The Earlier You Act, the More Options You May Have
Unfortunately, a foreclosure can create long-term financial challenges that become harder to address over time. A foreclosure can remain on your credit history for up to ten years and can prevent you from qualifying for another home for quite some time. A foreclosure can make it difficult to rent a living place without other forms of collateral and can even complicate the financing of smaller purchases like cars or furniture.
Here's how a short sale can either eliminate or minimize the damage of a foreclosure:
First, you may avoid having a completed foreclosure appear on your financial record.
Second, you can either avoid or lessen a deficiency judgment or tax liability during the short sale negotiation with the lenders.
Finally, a short sale may give you more time and flexibility to find a new place to live without the pressure of an active foreclosure timeline.
Every situation is different. Short sale approval, credit impact, tax consequences, and deficiency issues depend on the lender, loan terms, and individual circumstances. Homeowners should consult qualified legal, tax, or financial professionals when needed.
Help Finding the Right Rental
Facing Foreclosure or Considering a Short Sale?
Realty1One can help you understand your options and take the next step.