Tips & Advice
Know your situation and know your options.
Short sales and foreclosures have some similarities, but understanding your situation and the options available to you can make a huge difference in how things unfold and what you end up owing.
A bank takes ownership of the house, and the bank drives the selling process. The bank sees all offers and decides which to take, even if this means taking a quicker sale with a lower sales price. This is the final result, only if a homeowner cannot get current on the debts against the home or successfully find an option to accept a short sale.
A financially distressed homeowner decides to sell their property for less than the amount due on the mortgage. The buyer of the property in this case is a third party (not the mortgage company or bank), and all proceeds from the sale are paid to the bank to settle as much of the debt as possible.
In a short sale, the homeowner still drives the selling process and is allowed to choose the buyer’s offer they want to pursue, even if the lender has a right to review offers. One important difference is that even if a lender has the right to review a short sale offer, you are not required to bring every offer to the lender for approval. You can bring one offer to them at a time until they approve, and you are not obligated to submit offers for review if you feel that they will leave you with too much of the debt.
It’s important to remember that in either scenario if the home sells for less than is owed, you are still responsible for the remaining debt. For this reason – among others – it is much better to drive the sales process yourself, rather than give up control and let the bank handle it.
The foreclosure process can be very intimidating. Both of these options could leave you with debt after the sale of your home. But a short sale gives you much more control of the process, and can often save you money and headache because you are working with the bank to find a solution sooner, rather than later.
If you’ve read enough, but still have more you want to process and consider, we’re available by phone, just call and let us know how we can help.
