What is a Short Sale?
A short sale is often used as an alternative to a foreclosure on a mortgage. While short sales can be difficult to get in today’s market, they are a simpler way to resolve debt leftover from a loan.
A short sale is a transaction in which the bank lets the delinquent homeowner sell the home for less than what is owed. Only a couple years ago, short sales were common in the DC Metro Area. As home values have begun to increase, we’re not seeing quite as many in this market.
A Few Reasons to Consider a Short Sale for Your Washington, DC Home
The biggest benefit of a short sale is avoiding a foreclosure on your home. Foreclosures can lead to a variety of financial problems, starting with the inability to get a new loan for a home or rental property. Foreclosures can stay on your credit record for up to seven years.
With a foreclosure, you face all kinds of ramifications with your credit. Creditors may fear that they won’t get paid, which could cause your credit card companies to increase your interest rate.
A short sale relieves the debt that is leftover from what is owed on the mortgage, allowing both the bank and the seller to move on. It is also easier on your credit score, which can allow homeowners the ability to recover in the long run.
Buying a New House
As mentioned, a foreclosure can last up to seven years on your credit, making it challenging to get a loan for a new home.
Short sales offer a little more flexibility for the seller. Depending on your bank, new home applications can be filed two years after your short sale. Mortgage lenders are also more likely to approve a loan following a short sale than a foreclosure. Again, this all depends on the actual bank and lender with whom you’re working.
No Fees Involved
With a foreclosure, your mortgage lender may tack on extra fees that only make the damage worse. Some real estate agents may also charge a fee for helping facilitate the foreclosure with your bank. Be sure to inquire about all extra fees before going with a real estate agent or firm to help you work with the bank.
One potential benefit of a short sale is there are usually no fees associated with the process from the bank. The bank is looking to get the note off their books. They would much rather have a short sale then have you walk away from the property or go through a costly foreclosure.
The bank will request proof you are unable to pay your mortgage payments. Providing such documentation can be difficult. Keep things simple by finding a real estate attorney in your area who has experience dealing in this type of law.
Sell Your House This Week
If filing for a short sale doesn’t sound like the best option for you and you’re asking what you can do to sell your Washington, DC house faster, contact Express Homebuyers. We buy homes throughout the Washington, DC, Virginia and Baltimore areas and work with homeowners like yourself, who are having trouble selling a house the traditional way. Call us today at (877) 804-5252 for a fair, no-obligation cash offer. Or fill out the form below.