Becoming a homeowner is a dream come true for most people. Owning a property is a true proof of one’s independence. However, sometimes not everything goes according to plan and things can go south. Maybe you’ve lost your job, the interest rates went up or the debt piled up. When the foreclosure is just around the corner, the best solution seems to be making a short sale of your house. Below are some of many benefits of short sale over foreclosure.
It can completely prevent a foreclosure
A foreclosure has a negative impact on both the homeowner and the lender. The homeowner will have a mark on their credit report that will make it difficult to qualify for another mortgage or money lend for years to come. Also, banks lose money from a foreclosure, as foreclose houses don’t make a lot of money on the auctions and the expenses of foreclosure administrations are rather high.
Not only that, but the housing market will also be damaged from a foreclosure of your house. It is estimated that all houses that are in close neighborhood with a foreclose house lose some of their value on the market. This is why even the banks will usually prefer a short sale over foreclosure, as they will also get away with a better outcome.
It can save your credit
It’s always better to recover a part of a mortgage loan than to experience a complete loss. This is why banks will mostly settle for a short sale over foreclosure. This will allow both the lender and the homeowner to get a better ground when everything is over.
The biggest concern for most Milwaukee, Wisconsin homeowners is whether or not the bank will file a lawsuit against them because of deficiency judgment. What does deficiency judgment mean? The bank may want to recover the difference in the loan and in the paid amount, and in order to do so, they have to file a lawsuit against the homeowner. This will have a negative impact on your credit report, the same way a foreclosure would. However, this usually doesn’t happen if the homeowner has a valid reason for failing to pay their mortgages, for example if they’re going through a divorce, a death in family or loss of income.
It can save you money
According to the US Congress Joint Economic Committee, the average legal cost to a homeowner going through a foreclosure is estimated at around $7,500 – and that is without counting the additional costs that tend to pile up. If the homeowner can’t afford payments, the foreclosure could lead to bankruptcy.
Luckily, lenders won’t always file for a deficiency judgment. It all depends on the situation and their chances of winning back all the money the homeowner owes them on the property. When all sides agree on a short sale over foreclosure, a new buyer can pay off some, or all, of the homeowner’s debt. This will leave you in a better financial position.
It can help homeowner avoid scams
The foreclosure on your Milwaukee house is a terrible process enough without all the scammers who are waiting to profit on your misfortune. In fact, during the last several decades, there have been number of public scandals, such as people pretending to be able to save your property from foreclosure – for a certain amount of money. In the end, you will find yourself to be in even more debt, and still losing your house.
When you opt for short sale over foreclosure, you won’t have to deal with all the scam artists, as you will work with professionals. Especially when you decide to make a short sale to a direct buyer or an investor, such as Sparks Property Investors LLC, who will close in on your property fast, without any catches or promises that they don’t have any intention on keeping.
It can benefit both real estate agents and real estate investors
Short sales can bring great profit to real estate agents who have learned all about the complicated process that it truly is. The agent can make a reputation when capitalizing on the great number of short sales and they will create a new source of business. The process of learning and training for short sales is long and hard, but it can bring a huge amount of earnings, as well as improve an agent’s reputation.
At the same time, investors can get advantage if they make a purchase on a short sale. They will buy a house at a price that is below market value, and they will have all of the information about the house ready. This has another good option for homeowners, as you can make a deal with a real estate investors, such as making a plan on rebuilding your credit or renting your old property so you could still live in the same Milwaukee house until you deal with your finances and get back up on your feet.
It gives you more control over situation
When you decide on short sale over foreclosure, you will still be facing all of the paperwork and meetings that you would have to do when your house is in a process of foreclosure, but the process plays out more like a traditional sale. Any kind of sale on your Milwaukee house is still rather stressful and an emotional process. You have to deal with the expenses, house showings, commissions and documents… Still, a short sale gives you much more control over the situation than leaving yourself at the mercy of the attorneys during a foreclosure process.
It gives you a peace of mind
Any kind of real estate transaction is long and stressful, but they still can’t come close to emotions you will have when dealing with foreclosure. The extremely stretched out legal process, the hit that your credit will face and the stigma that goes with it all is pretty nerve wracking. Most of this can be avoided when you decide for short sale over foreclosure. While short sales aren’t completely risk free, they still help you avoid legal actions and can help you end up in a much better position. They can lessen your financial burden and help you salvage your credit to a degree. Also, you knowing that you’ve done everything you could to help yourself will provide you a peace of mind and will help you not feel guilt about the debt you’ve gotten yourself into – something that can happen to everyone and is nothing to be ashamed of.