In the current economic climate short sales have become more prevalent then anytime in history. Unfortunately the need to short sale is a necessary process for some and below you will find the thing you need to know.
1. You pay no out of pocket expenses. Your short sale transaction will be an as-is sale, meaning you won't have to bother spending time and money on tedious home repairs. Your lender also pays for all commissions and services on both sides of the transaction, giving you the least hassle possible in moving on to your next home.
2. Your credit damage is minimized. A short sale will have a recoverable impact on one’s credit, compared to the devastating effect of 250-350 points a foreclosure has on a credit score.
3. You can buy another home in just three years. Homeowners who choose to short sale only have wait three years before buying a new home. Foreclosure prevents you from owning a home for up to 7 years under new lending guidelines.
4. You may qualify for relocation assistance. Yes, that's right, you might be able to get cash when you short sell your home. Lenders are offering anywhere from $3000 to $20,000 in relocation assistance at the moment.
5. You have an assured sense of relief. Short sales in lieu of loan modifications give homeowners a firm new start. The Department of the Treasury just released a study revealing that 55% of homeowners re-default again within six months of receiving a loan modification.
6. You save money and pay less taxes. The Mortgage Forgiveness Debt Relief Act of 2007 allows short sale homeowners to avoid taxation. In the past you would receive a 1099 and owe taxes on the deficiency balance.
7. You have a dignified solution to a difficult problem. A short sale allows you to stay in your home during the negotiation period. A foreclosure can become an embarrassing situation as a bank representative comes by to lock up the doors and windows, change the locks, and put up "bank owned" signs on your property while the local Sheriff is contacted to have you forcibly evicted.