What is a short sale and how does it benefit you here in Charleston?
If you are wondering How to Avoid Foreclosure in South Carolina , a “Short Sale” can be an excellent option to Stop Foreclosure if you owe more on your Charleston, SC home that it is currently worth. If you have not heard of the term short sale before or you aren’t really familiar with how it works and what are the benefits, we’ll cover that in this article so you. Then you can hopefully make an educated decision as to whether a short sale is a good solution for your specific situation.
What is a Short Sale and What are the Benefits?
So in simple terms, a short sale is when your lender agrees to accept less than they are owed to satisfy your debt so you can sell the property. In a very few cases, they may agree to only release their lien on the property without completely satisfying the debt, but it is almost always better to do short sale than to get a full foreclosure on your credit report. A short sale is not guaranteed, especially in today’s market, but if you can get it approved, it’s a great way to resolve left over debt and to avoid a foreclosure (here’s a great definition of what a foreclosure is in case you’re not sure).
Short sales were very common in the market a few years back when the flood of foreclosures hit the Charleston market… but as foreclosures have slowed down and home values have climbed back up a bit, lenders are a little less likely to offer a short sale as an option as they used (but they are still doing a lot of them!).
Here are a few reasons you may want to consider short sale on your Charleston 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 7 years, sometimes more!
Even renting can become more difficult as your credit score is dramatically effected and you often have to disclose a foreclosure on a rental application.
And in an effort to hire and promote the best and most responsible people, future potential employers sometimes look at a foreclosure as a possible disqualification. You will want to avoid foreclosure so you can check “No” on any future credit or job application.
With a foreclosure, you face all kinds of ramifications with your credit. Buying a car and renting a house may be impossible through the normal bank loan routes.
If you work with money at your job, you could even face termination if your employer puts a lot of stock in that kind of thing (most employers won’t but it has been done before).
A short sale relieves the debt that is left over from what is owed on the mortgage, letting both the bank and the seller move on. A short sale is also easier on your credit score, which can allow a homeowner the ability to recover in the long run. Your credit report will only show a pre-foreclosure status, which reduces your credit rating minimally compared to a foreclosure.
Buying a New House
A foreclosure can last for a long time, making it impossible to purchase a mortgage again for up to 7 years or more.
Short sales offer a little more flexibility for the seller, allowing new home applications only 2 years after the filing depending on the bank. It also makes a mortgage lender more likely to approve your loan than if you had a full foreclosure, getting you back into a home faster.
Again, this all depends on the actual bank / lender you’re working with… so if they’re giving you a hard time a year or two after a short sale… shop around and find another bank 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 delinquent loan 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 or declaring bankruptcy and dragging out the foreclosure process, 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. And NEVER send money to some out of state company that promises that they will negotiate a settlement for you to stay in your home! I’ve seen way too many people lose what little they had to some unscrupulous scam artist. If it is not your lender you are dealing with directly, make sure you enlist the help of someone LOCAL who is very experienced with short sales and has great references!
Our company, Charleston Home Buyers 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 Charleston area house. We have many years of experience with successful short sales and … so connect with us by calling (843) 722-8937 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 Charleston 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. We know how very frustrating and daunting the process of working with your lender to avoid foreclosure. Never get so frustrated with your lender that you just give up and walk away. In 99.99% of cases, it is better to do a short sale than let the home go to foreclosure. Let me show you how to do just that.