Some homeowners, on the other hand, cannot afford to wait out the storm and are truly in distressed situations. They need to sell their homes and they do not have the cash to bring to the settlement table to cover the difference between the sales price and the liens on the property. What to do?
There are two options: Foreclosure on the courthouse steps or a bank approved "short sale".
Going through a foreclosure is a serious and credit-damaging event. The foreclosure on the credit report will most likely prevent homeowners from purchasing homes anywhere from 5 to 7 years in the future. The foreclosure is also an expensive procedure for the banks. They will incur attorney fees and trustee fees.
In a "short sale", the bank agrees to approve the sale of a property for less than the mortgage(s) owed by the homeowner. The "short sale" will damage the homeowners credit yet for a shorter period of time. In fact, some homeowners will be able to purchase a home within 2-3 years from the date of the short sale. The "short sale" will most likely not be as costly to the bank as the foreclosure in terms of attorney fees and trustee fees. A win win for all concerned.
If you are a buyer in the market for a home, short sales should not be overlooked as possible properties to purchase. Unless, of course, your particular situation will not allow you to be at the mercy of the banks time table for settlement.
If you are in a distressed situation call me today for information on the short sale process.