Should You Short Sell Your Home or Send It To Foreclosure?
By Sue Lapeter | March 23, 2012
2012 is off to a great start for my clients! I’m happy to report that I’ve already sold 15 homes since January 1st. These homes are flying off the market. I list them and 1-3 days later offers have been placed and accepted. It’s incredible!
Obviously, I’ve been meeting with a lot of sellers lately. The questions I get asked most frequently have to do with foreclosures. People want to know if I’m an experienced foreclosure agent and if foreclosing is a good option for them. While I do have a lot of experience with foreclosure, I also have experience with Orange County short sales and I almost always tell people that short sales are a much better option than foreclosure. Here’s why:
- Short sales are being streamlined. In the past, short sales were notorious for being long and complicated processes. However, over the years, banks have gotten much better at processing short sales. They have streamlined the approval process and now it is so much faster and easier to sell a short sale. I’ve been selling them since the beginning of the recession and I can a huge difference in this years short sales versus previous years.
- Many banks are offering money to short sale sellers. I recently sold a short sale property and the seller received $30,000 from Chase after the house was sold. The seller hadn’t been able to make a house payment in months and was still abel to walk away with money. Chase, as well as other banks including, supposedly, Bank of America and Wells Fargo, are giving homeowners money to motivate them to short sale. It costs these lenders quite a bit of money if the house goes into foreclosure so they want to avoid that. Paying the seller saves them the expense and hassle of a foreclosure.
- Short sales give complete debt forgiveness. A new law has been put in place that releases short sellers from all debt obligations. You may have heard that short sellers are only released from a primary mortgage or loan. However, last year California Governor Jerry Brown signed Bill 458, which states that once a short sale has been approved, ALL MORTGAGE DEBT IS FORGIVEN. This includes mortgages on primary residences, investment properties, second or third liens, etc. Once you get approval for a short sale, and once the short sale is complete, lenders can no longer pursue you for money that you previously owed them.
- Short sales have less negative impact on your credit. This result varies for every person. Some people experience very few credit points lost, while some experience the same amount of points lost as with a foreclosure. However, most people who do a short sale qualify for a new mortgage in shorter time than those who foreclose. Doing a short sale shows some effort. You didn’t just give up and walk away from your house, you made an honest effort to do the right thing and sell it to someone who could afford it. Lenders respect this.
As you can see, short sales offer far more benefits to homeowners then foreclosures. If you have questions about Orange County short sales, please give me a call at 714-728-9018. If you are thinking of short selling your Orange County home, call me for a confidential consultation. Free yourself from the burden of unpaid mortgage bills by putting your house up for short sale.
photo taken from renjith krishnan/ FreeDigitalPhotos.net
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