Benefits of Short Sale.
A short sale of the real estate can be advantageous to the homeowner or borrower because:
- It can help them save their credit history.
- It can help them find a solution to an otherwise embarrassing situation.
- It could reduce the stress of finding funds to answer a certain financial obligation.
- It is the faster solution to mortgage foreclosure process.
It will not save their credit. Herbster
Herbster- the answer to the short sale question in regards to the persons credit score is currently completely dependent on how the lender reports the short sale to the credit agencies. Each lender can choose how to report the short sale, so it COULD be devastating to someone’s credit score, but that’s by no means automatic. Currently FICO is working on standardizing the reporting system for short sales so that there is some sort of baseline to work off of, but I’m not sure when this new rule will go into effect…
Jake, Thanks for the heads up. I’m embarrassed to say that this happened to me many years ago and my credit was fryed. So when I seen that post above I blew a gasket. Thanks to that happening to me, pushed me into studing RE to this day. Thanks, Herbster
A few benefits of a short sale:
- Typically all fees ie. commissions, escrow, title, etc. are paid by the bank
- Mortgage debt relief
- A short sale most likely will affect your credit less negatively than a foreclosure
- Most banks will pay property taxes that are in arrear
- After a short sale, a home can be purchased in as little as 2-3 years
- Some government programs and banks are offering cash incentives for home owners who conduct a short sale
For home owners who have exhaused the loan modification route and have a valid hardship, a short sale can be an attractive option.