Thursday, December 11, 2008

Take the Bull By the Horns: Selling Short Sale vs. Foreclosure

Many bury their heads in the ground in denial and allow their homes to go into foreclosure. This is not the way to go. While life throws you a curve ball: a death, a divorce, rising interest rates; and you may not be able to avoid foreclosure, home owners need to stand up to the hard times and need to take the bull by the horns. Even though a short sale and foreclosures impact your credit scores. In reality, the short sale shows creditors that the seller took responsibility for the problem and it will impact your credit for 2 years versus foreclosures impacting your credit for 5 years. Those facing Short Sales and Foreclosures should always consult their lawyers and accountants before listing their homes because there could be tax consequences.

While it says "Short Sale", it is the furthest thing from a short process. You need to be ready for the long haul 6 weeks to 6 months after an accepted offer. A short sale should be called a Short Pay. The seller is selling the home for less than they owe to the bank. At this time, Banks are inundated with short sales and foreclosures. In the end the banks are losing the difference. So they have appraisals to verify the value. The market has driven prices down and the bank's may have to agree to accept the loss. This is not an easy process, pulling thousands of dollars away from a bank.

The last thing people in financial crisis want to do is spend more money on a sinking ship. However, when selling a short sale you can actually get multiple offers when the home is clean and free of clutter. When there is trash thrown about and the weeds are growing out of control, buyers have a hard time seeing the potential. So take the bull by the horn. Hire a qualified agent who has handled short sales before and who you can trust to guide you through the process.

--Virginia Hall

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