IS A SHORT SALE GOOD FOR YOU?

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 you need to be delinquent on your mortgage or in bankruptcy 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.

Below are the top 5 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 the forgiveness of all remaining debt. As an example, if your mortgage is $250,000 and you sell the home for $200,000, then the remaining balance of $50,000 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 and have a hard time believing that such forgiveness is. But as research shows, the national statistics prove that a short sale will sell for 26% more than a property that went to foreclosure. That 26% more is just the purchase price and does not include the total cost to of the foreclosure, loss in mortgage payments and the amount of time the asset has been non-performing. 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 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 .

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) Depressed Housing Market

Many of our clients have tried to postpone selling their home for a good reason; they believe the market will return to a point where they are no longer upside down. They either continue to stay in the home and struggle, or move out and rent out the home. Unfortunately, both scenarios do not work out. Since the market continues to decline and no significant appreciation will be seen for another decade, the notion of hanging on or renting the home out prove to be disastrous. Our candid advice to our clients that are contemplating either one of these scenarios is to plan to not sell for 7-10 years.

This will allow for them to try and pay down as much principle as possible to try and reduce the size of the mortgage and allow the market time to appreciate a bit. Easier said than done, but we want to ensure that real expectations are set and homeowners don't get delusional with what this housing market is like and where it is headed.

5) Selling With Dignity

This benefit should be higher than #5 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. JF Ridge Investments has specialized in Short Sales for over 3 years and is one of the top short sale negotiators in Massachusetts. For more information, please contact us by clicking here!!!