Foreclosure is a bad idea. Short sale isn’t great, either. What’s my option?

When you’re underwater in your house, or when you know you’re headed toward foreclosure because of financial hardship, a short sale can seem like a shining beacon of hope. A way out that won’t destroy your credit for 10 years. A way to avoid the social stigma and emotional toil of wading through a foreclosure.

But short sales come with their own set of ramifications. Let’s examine the facts:

  •  A short sale will impact your credit. Many factors go into determining how much a hit your credit will take. But, remember your mama telling you that there is no such thing as a free lunch? That’s applicable here. A short sale remains on your credit report for 7 years.
  • A short sale will compromise your ability to purchase another house. If you short sell, you won’t be able to purchase property for 2 years (as opposed to the 7 years you’ll need to rent before buying, if you go through a foreclosure).
  • A short sale strips you of your power as the homeowner. When you go through a short sale, the lender decides whether or not to accept the offer and decides the terms. And you could be on the hook for the difference between the original loan agreement and the short sale price. An attorney can help negotiate with the lender, but that isn’t free, either.
  • A short sale means navigating the real estate market. Realtors, potential buyers, readying the house for sale… they’re all part and parcel of the short sale process.
  • A short sale often drags on… and on…and on. The short sale process can be a lengthy one. Often you’ll need to stop paying on your mortgage to qualify for a short sale. Then you have to wait for the lender to respond to offers. All the while, you’ll be receiving notices from the lender because, until the ink on the contract is dry, you are still delinquent and responsible for your mortgage.
  • A short sale is often contingent on the owner showing financial hardship. Proving financial hardship is no picnic. It’s very much like applying for a loan–you’ll need to provide a virtual mountain of financial documents, including bank statements, W2’s, tax returns, and other miscelanea just to prove that you can’t satisfy the loan or the monthly mortgage amount. Lenders are keen on you paying the entire amount of the loan, even if your property is underwater. So, if you can’t show hardship, you won’t likely be able to convince a bank to go through the short sale process. Then what? A foreclosure? That’s worse.  

So, if foreclosure is a bad idea—and a short sale isn’t great either—what’s your option?

Sell your house to a real estate investor.

Angie Buys Houses Central Florida can buy your house. You’ll be able to simply walk away from the property within weeks. If you never passed the 60+ day delinquency, your credit won’t even take a hit. Or, if you are in a situation where you have missed payments, I can take over your payments moving forward, which may improve your credit score (if you have been delinquent for over 3 months).

I buy your house directly. NO fees. No appraisals. I don’t need to qualify for bank financing. Simple and straight-forward. And you retain the power to accept or reject the offer.

Even more important for cash-strapped property owners or folks underwater in their mortgage: I buy property as-is. No need to pour money into the property just to sell it. I buy move-in ready houses and houses that need repair.

Sometimes, when you’re dealing with property ownership, it feels like there are no good answers. But, no matter how complicated your situation feels, you are not alone. Give me a call, so you can explore all of your options. I promise I’ll work to understand your unique situation and find creative win-win solutions.

Let’s chat: 407-603-6285

 

 

Photo by Mubariz Mehdizadeh on Unsplash

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