What is a Short Sale?
We hear it all the time: what is a short sale? A short sale is a transaction in which banks and lending institutions allow the upside down homeowner to sell the home for less than the amount you still owe on the mortgage loan. It is generally a last resort, but it helps keep homeowners from entering a foreclosure. At Diditan Financial we don’t just think of ourselves as a mortgage company with low cost loans; we consider ourselves vanguards that rescue drowning homeowners. You may wonder, what is a short sale going to do for me that is so advantageous to my situation. Here’s the thing: short sales are not fun, but rather than view a short sale as a sign of failure on your part to pay your mortgage, we like to look at them as a great way to get out of a bad situation that will prepare you to turn right around and get into a better mortgage loan that you can afford in a home that is right for you. Have you ever been laid off from work and then you found a job that you liked even better and that paid more money? A short sale, if you choose to view the glass half full, if a doorway that can lead you to a better position in life with a loan more ideal to your situation hat will save you more money. So a short sale solution is better than a foreclosure because it allows you the opportunity to have a “do-over”, whereas a foreclosure slams that door shut on your way out. When people ask, what is a short sale, it can, for some, be that saving grace that prepares them for a better home loan and an easier life ahead.
First things first, when you call Diditan Financial, we will do our own research to see if there is a way you can still stay in your home and afford mortgage payments. In some cases where banks have told borrowers they are not eligible to refinance, Diditan has pulled a rabbit out of a hat and found the perfect refinancing opportunity for some buyers who were about to give up. If, however, a short sale is the only way to keep you out of a foreclosure, our dedicated team will fight to make sure you walk away with the best deal possible, and we will give you a plan of action to get you back into a home that you will love even more than your current house.
What is a short sale? A short sale is tricky, and confusing at times. Here are some of the most common questions we get from homeowners who are trying to weight their options:
Is a Short Sale Better than a Foreclosure?
Yes, if you can avoid going into foreclosure, by all means steer clear. A foreclosure can stay on your credit score longer, it slashes away more points causing significant damage, and rebounding back into the real estate market to buy a home again will take you longer than recovering from a short sale. Also, a foreclosure can deliver unforeseen financial and legal problems that can linger for years.
Is it Good to Stop Paying your Mortgage so You can do a Short Sale?
When you were a kid did anyone ever tell you that saying “Bloody Mary” three times in a bathroom mirror would summon the ghost of Mary Tudor (the Queen of England who burned over 300 Protestants at the stake) ? This “summoning” was an old myth children spread on the playground, and those same kids are now adults spreading another myth that you have to be in default in order to do a short sale. It is advantageous that you call Diditan Financial because there are actually certain rare circumstances in which some payments need to be delinquent, though this is by far not a typical scenario. What is a short sale going to require you to do in order to qualify for this alternative to a foreclosure? Each homeowner has a different background and a different set of circumstances. Make sure you learn the facts from the myths by speaking to our dedicated team.
Will the Bank Come After me for the Difference in the Short Sale?
It is doubtful the executive board of Wells Fargo will form a lynch mob and come pounding on your door with torches and pitch forks, but this is precisely why we at Diditan Financial encourage our clients to seek legal advice and ask questions like: what is a short sale going to do to my financial obligations? Depending on the state you reside in, some loans support a personal guarantee, while others permit deficiencies.
Why do Banks Reject Short Sales?
Many banks reject short sales because they are in the business of making money, not making friends. Often, banks stand to make a greater profit if homes go into foreclosure, so they quote homeowners at outrageous price knowing that the buyer would ever pay it. Have you ever heard stories about homeowners who bought foreclosed homes sight unseen, and when they got the keys they discovered all the plumbing had been ripped up, profanity scribbled on the walls, and there were things left on the floor you would never want to talk about in polite company? Some homeowner’s try to get back at the banks by diminishing the home’s value, but because many banks are opportunistic, they won’t disclose the interior condition and will instead reduce the price as a site-unseen property. If the banks are especially serpent-like they will even go as far as leaving scraps of expensive marble and tile on the patio along with appliance boxes to make it look like a renovation was done. Giving such an appearance can easily drive up the price of the home in a bidding war. So, as you can see, banks will reject short sales because sometimes they just stand to make more money on a foreclosure, and many will go to great lengths to squeeze a buyer’s last cent right out of their pocket in the process.