At the closing of a short sale, everyone – such the lender, the lawyer, the agent – gets money; however, the seller gets nothing at all. Short sale sellers, simply, do not receive proceeds at closing.
If the seller walks away with nothing at the end of a short sale, what then is the use of a short sale?
A seller may not receive a cent after a short sale, but this process offers more benefits to the seller. Here are some of the benefits of a short sale:
Short sales prevent foreclosures. While both short sale and foreclosure terminate the homeowner’s right to a property, foreclosure carries with it a stigma. If ever you plan to apply for another mortgage, the one most important question that you will be asked is “have you ever had a foreclosure?”
You are Left with Dignity
In a short sale, you and your family’s dignity remain in tack. Like in any normal home selling, you and your family look for another place to stay, pack up your things and leave. In foreclosure, representatives of the lender will knock on your door, tell you that the house is theirs and evict you and your family. This in tack dignity also applies to your neighborhood as a short sale prevents the stain of bank owned REO and all the stigma that comes with it.
Minimizes the Impact to your Credit
A foreclosure is catastrophic to your credit. With a short sale, you have a better chance of qualifying for another mortgage in years to come.
Avoiding Deficiency Judgment
A well-negotiated short sale will result to the waiver of any deficiency. In both short sale and foreclosure, you will lose your house. While in short sale, there is a chance of deficiency waiver; in foreclosure, deficiency judgment could haunt you.
You may not walk away with a cent after a short sale, but with this process, you will be given the needed second chance.
Get your short sale started right away!