Understanding What is a House for Short Sale?
Understanding what is a House for Short Sale?
How is this beneficial to you?
In a simple term a house for short sale is listed for sale at an amount that is lower than its remaining loan balance.
A house for short sale offers a triple benefit:
- The present owner avoids plenty of the damaging effects of foreclosure, including lasting impact to their credit reports, and future issues on government funded loan programs.
- The lender avoids the unnecessary costs and substantial legwork concerned in foreclosing and adequately getting rid of a foreclosed home.
- The home buyer benefits financially, getting a quality home at a lowered price. This is a unique opportunity in the prevailing real-estate market.
Are you a home buyer?
Substantial savings might be in store with a house for short sale, as the bank is willing to allow the home to be sold at less than its current loan balance. To explain, buy your perfect home for less!
Are you a borrower?
A house for short sale will impact a house owner's credit far less than a foreclosed home. Repossessions remain on official record permanently and can impact borrower credit so long as 10 years or more. Also, the foreclosure must be revealed when applying for govt. funds such as Fannie Mae, mortgage or investment mortgages for as much as 7 years!
Once the sale is over, delinquent payments will show on your credit score. But a home for short sale often shows as 'paid as agreed ', 'paid as negotiated ', or 'settled'. Therefore , a short sale is an ideal option if loan modification is not available. The impact to your credit will be a lot less serious.
What about lenders?
The lender is usually glad to unload the house for short sale because this allows them to reduce expenses related to foreclosure.
It truly does come down to the bottom line!
About the Author:
Kendra Chui is a short sale process expert helping homeowners get short sale approved with cash back.