Are you a homeowner in Montgomery County, Pennsylvania, facing financial hardships and struggling to meet your mortgage obligations? In such situations, understanding the concept of a short sale can provide you with a viable solution. A short sale is a real estate transaction that offers an alternative to foreclosure, allowing homeowners to sell their property for less than the outstanding mortgage balance. This introduction aims to explore the concept of a short sale, highlighting its benefits and how it can assist homeowners in Montgomery County, PA, during challenging times.
In this article, we will delve into the fundamental aspects of a short sale, its mechanics, and the potential advantages it offers to homeowners facing financial difficulties in Montgomery County. Whether you are currently experiencing financial hardships, or simply seeking to expand your knowledge about real estate options, this guide will provide you with valuable insights into the world of short sales and their implications for homeowners in Montgomery County, PA.
What is a Short Sale and How Does it Benefit You?
A short sale is a real estate transaction where a homeowner sells their property for less than the outstanding mortgage balance. It is typically used as an alternative to foreclosure when the homeowner is facing financial hardship and cannot afford to continue making mortgage payments. By opting for a short sale, homeowners can avoid the damaging consequences of foreclosure and potentially benefit in several ways.
- Avoiding Foreclosure: One of the primary benefits of a short sale is that it allows homeowners to avoid foreclosure. Foreclosure can be a lengthy and stressful process, often resulting in the loss of the property and severe damage to the homeowner’s credit score. With a short sale, homeowners can proactively work with their lender to negotiate a sale that satisfies the outstanding debt, thereby preventing foreclosure.
- Minimizing Credit Damage: While a short sale does have an impact on the homeowner’s credit score, it is generally less severe compared to a foreclosure. With a short sale, the homeowner’s credit report will typically show a “settled” or “paid as agreed” status, which is less damaging than a foreclosure notation. This allows homeowners to recover their creditworthiness relatively faster and positions them for potential future homeownership.
- Debt Relief: By engaging in a short sale, homeowners can alleviate their financial burden by selling their property for less than the mortgage balance. Although it might result in a shortfall between the sale proceeds and the outstanding debt, lenders sometimes agree to forgive or negotiate the remaining debt. This debt forgiveness can provide significant relief to homeowners, helping them move forward with a clean slate.
- Control Over the Sale Process: Unlike a foreclosure, where the lender takes control of the property and the sale process, a short sale allows homeowners to maintain some control. They can work with a real estate agent, market their property, negotiate offers, and have a say in the sale terms. This level of involvement empowers homeowners to potentially secure a better outcome and find a buyer willing to purchase the property at a reasonable price.
- Timely Resolution: Short sales offer a relatively quicker resolution compared to foreclosure proceedings, which can drag on for months or even years. With a short sale, homeowners can expedite the selling process, potentially minimizing the emotional and financial toll associated with a protracted foreclosure battle.
- Fresh Start: Perhaps one of the most significant benefits of a short sale is the opportunity for a fresh start. By unburdening themselves from an unmanageable mortgage, homeowners can start rebuilding their financial lives. They can focus on improving their credit, saving money, and eventually considering homeownership again in the future.
Here are a few reasons you may want to consider short sale on your Montgomery County home
You Avoid Foreclosure And The Harmful Effects Of It
The best benefit of short sale is that you avoid a foreclosure on your home. Your mortgage lender accepts less than what is owed on your mortgage, leaving you without the debt that you cannot afford.
Foreclosure can lead to all kinds of financial problems, starting with the inability to obtain a new loan for a home because a foreclosure stays on your credit record usually for up to 7 years.
Even renting will become more difficult as your credit score would be affected, and you often have to disclose a foreclosure on a rental application. Foreclosures can also last a long time (up to 7 years as mentioned above), making you wait years to even qualify for a new mortgage.
Credit Worries
Experiencing a foreclosure can lead to various negative consequences on your credit. Obtaining a car loan or renting a house may become extremely difficult using the traditional bank loan channels.
Furthermore, if your job involves handling finances, there is a possibility of facing termination, particularly if your employer considers this matter significant (although most employers do not take such actions, it has occurred in the past).
On the other hand, opting for a short sale can alleviate the remaining debt on your mortgage, enabling both the bank and the seller to move forward. Moreover, a short sale has a less severe impact on your credit score, providing homeowners with the opportunity to recover in the long term. Your credit report will only reflect a pre-foreclosure status, resulting in a minimal reduction of your credit rating compared to a full foreclosure.
Buying a New House
Foreclosures can have long-lasting effects, potentially preventing you from obtaining a mortgage for a period of up to 7 years.
On the other hand, short sales provide greater flexibility for sellers, as they may be eligible to apply for a new home loan as soon as 2 years after the filing, depending on the specific bank’s policies. Additionally, opting for a short sale increases the likelihood of mortgage lenders approving your loan compared to a full foreclosure, enabling you to reenter the housing market more quickly.
It’s important to note that the specific bank or lender you work with plays a significant role in these outcomes. If you encounter difficulties with a particular institution within a year or two after a short sale, it is advisable to explore other options and seek out alternative banks or lenders to work with.
Usually No Fees Involved
One potential benefit of the short sale is there are usually no fees associated with the process from the bank. The banks just want to get the note off of their books… and if it can be proven that your house is “underwater” (you owe more than your house is worth)… and you’re at the risk of walking away from the house… the bank may rather work out a short sale instead of going through a costly foreclosure.
With a foreclosure, your mortgage lender may tack on extra fees that only make the damage worse.
Some real estate consultants may charge a fee for helping facilitate the foreclosure with your bank… so check with them before you enlist a real estate agent or firm in helping you with this.
Our company, Property Buyer Today may be able to guide you in the right direction on how to give yourself the best shot at a bank approving a short sale with your Montgomery County area house… so connect with us by calling 844-977-3336 or shoot an email to us through our contact page here.
Getting a Short Sale – What You May Need To Provide
You will have to provide the bank with proof of being unable to pay your mortgage payments. This can be difficult and is best resolved by finding a good real estate attorney in your area that has experience dealing in this type of law.
If you don’t know who to contact or where to turn to see if a short sale may be a good option for you… get a hold of us.
We won’t charge a thing to discuss your situation with you and let you know your options.
And we can even give you guidance and pointers at absolutely no cost or obligation.
Sometimes we’re actually able to do the work for you or even buy the house from you to get you out from under that mortgage… so that may be a viable option for you.
We buy Montgomery County houses and we work with home sellers like yourself who are having troubles getting out of your house the traditional way… or who can’t (or don’t want to) go the usual route of listing with an agent.
Get a hold of us anytime to discuss your situation. We’re here for you!
Or, if you want to see what we can offer on your house… click the link below and fill out the form on the next page. We’ll make a no-obligation cash offer to you within 24 hours. At least that way you know whether that is an option for you or not.