Foreclosure on a home has consequences for the family, the community, the housing market and the economy. However, the option for a short sale does provide a way for troubled homeowners to prevent foreclosure and many of the dire penalties involved.
What is a short sale?
A short sale is an agreement in which your mortgage lender agrees to accept a payoff on the loan for less than the balance. Many lenders agree to a short sale because they receive more of the loan balance in comparison to the amount they would gain from selling the property following a foreclosure. This process aids in maintaining home values in the community in which the property is located and helps the homeowner maintain a better level of credit compared to a foreclosure as well. In a foreclosure, your credit score can be lowered by as much as 300 points and may never be fully repaired.
In most instances, homeowners considering a short sale must meet specific criteria to qualify. Additionally, you will likely need to provide evidence of economic hardship, and have little or no equity in the property.
How do short sales differ from other real estate transactions?
A short sale is not a typical real estate transaction. Most real estate transactions involve the home’s sellers and their real estate agent, the buyer and their lender, and their real estate agent. In a short sale situation, all of those parties may be involved, in addition to the sellers’ loan servicer, a housing counselor, any junior lien holders, mortgage investors and insurers.
How can SAFAssist help?
With so many parties involved in a short sale, the process can be difficult to complete without a systematic program such as SAFAssist. The SAFAssist program provides a dedicated attorney to negotiate on behalf of the seller. An experienced Coldwell Banker Howard Perry and Walston real estate agent with experience in short sales will list and market your home and find a buyer to complete the transaction. The SAFAssist staff of experts acts as a liaison between all parties involved. They have your best interests in mind and will work to expedite the short sale transaction.
It is essential to use a service of professionals who will prevent you from missing a detail that could delay closing the transaction in a timely manner and to pay close attention to the specifics required by all participating parties. The SAFAssist program provides all of these services at no out-of-pocket cost to the seller.
How do I recover?
Understandably so, after a short sale, you may feel very intimidated to pursue homeownership again and may have very real concerns about your financial standing. However, generally speaking, homeowners who are dealing with past credit issues because of financial constraints should be able to have a new home in approximately three years on average.
A short sale will negatively affect your credit score, and the longer it takes for the short sale transaction to close, the worse it affects your score. However, you can work to improve your score. Two great ways to rebuild your credit score are to pay your bills on time and avoid maxing out your credit cards. The main thing to keep in mind is that although it will take some time, you can recover and buy another home in the future.