Sell Your House before a Foreclosure
It is truly a hard decision for many homeowners to have to say goodbye to their homes due to an impending foreclosure. Unfortunately, the real estate crash and the downturn of the economy have led to many property owners suffering financial distress and at risk of losing their houses. Foreclosures are also not at all beneficial to property owners, so being able to avoid them will be good for their credit standing.
An option to avoid a foreclosure is to sell the property in a short sale. The house will be put on the market with a huge discount, less than what the homeowner owes the bank. While this does not save them from the debt incurred, it will cover most of it. There are also other reasons why this is a better option (not to mention you get a cash offer rather than having to wait for your buyer to get approved by the bank):
- Protects Your Credit
A hit on your credit score can really affect you many years down the road. This is why avoiding any damage is important. Thankfully, many banks would also like to recover as much as possible in the case of the lender really going through financial hardship, which is why selling the property at a lower price is more acceptable.
- Prevent a Foreclosure
It is not just homeowners who lose out on a foreclosure. The banks will also have to incur some costs like conducting an auction. They will also receive less from the property than if it is sold before foreclosure. The home’s value will also decrease, as will the houses around it. This is why avoiding a foreclosure is a priority for everyone.
- Saves Money
Families at risk of foreclosure are already in financial trouble, and actually going through it will add to their debt. They can expect to pay around $7,500 on legal costs alone. This is the reason why many people with foreclosed and unsold properties end up having to declare bankruptcy.
The lender also enjoys savings from legal procedures, foreclosure sale costs, and other required paperwork. This is why many banks are more willing to accept just what the house sells for, in order to at least recoup some of the money in the first place.
- Benefit the Market
Foreclosed properties have wreaked havoc on the market, driving prices much lower and making these homes less desirable to buyers. This is because the process of purchasing a foreclosed home is also more complicated. Short sales can help avoid this, as homes are much more quickly sold and will no longer stay empty for a long time.
- Save Homeowners
Being unable to pay mortgage payments can really be sad for anyone. Selling the house is the best and easiest way to save homeowners from foreclosures and its long-lasting effects. It will also save them from scammers who want to cheat desperate homeowners into questionable “ways to avoid foreclosure”.
Sometimes an unsure prospect of earning more money from the sale of a property is not enough reason to vote against a short sale. In fact, beyond the financial aspect, there are many other benefits of going for the quick sale.