When a homeowner is unable to keep up with their mortgage payments, this can present an extremely challenging situation as they are left with two options: either to opt for a short sale or wait for the mortgage provider to initiate a foreclosure. A short sale is a transaction where a homeowner can sell the property at a lower price than the amount owed to the lending institution.
Contrarily, in an event of a foreclosure, the lender takes possession of the defaulted house and assume the responsibility to sell it, mostly via auction. Both of these options come with their distinct advantages, but short sale arrangement edges out foreclosure due to added benefits that it provides to a homeowner.
Why Is A Short Sale Better Than Foreclosure?
The biggest benefit of a short sale is that you will be able to avoid foreclosure, which is often considered as a social stigma. The transaction of a short sale takes place as a conventional home sale, with dignity and respect. You have the control of the sale, not the lending institution and you can choose whom to sell your house.
Moreover, it also protects your credit score as many credit bureaus do not use the term “short sale” on your credit reports, unlike foreclosure which can have a severe impact on your credit score and remain on the report for 7 years. In addition to that, if you apply for a loan in the future, you do not have to include information pertaining to a short sale in the loan application, but you may have to disclose a foreclosure, which can hurt your case.
Furthermore, the approval of a short sale takes around 2 to 3 months or even longer, which may allow you sufficient time to relocate, unlike foreclosure which requires you to immediately vacate the house. Your lender may initiate an eviction process if you do not comply, thus short sale saves you from such troublesome situation.
These reasons, amongst others, make short sale a favorable option for many homeowners. If you are undergoing financial vows and choose to move forward with short sale, it can be highly beneficial for your case to procure the services of an experienced real estate lawyer.
In the case where your lender does not agree to a short sale and threatens you with a foreclosure, your real estate lawyer will devise a foreclosure defense and protect your rights throughout the litigation process. In majority of the cases, lending institutions do not want to waste their time in the litigious processes as they can be costly as well as time-consuming.
Furthermore, using their technical knowledge pertaining to laws applicable to your case and refined persuasive skills, a competent real estate lawyer can negotiate a favorable offer to help you get through during the difficult financial situation.
If you want to find out more about this subject or wish to schedule a free consultation session with an experienced real estate lawyer, contact Fitzgerald Law Firm by calling at (630) 946-6060.