What is a short sale and how does it benefit you ?

If you’re thinking about that … great question!

We buy homes all over Metro Detroit, and in this article, we’re going to explore your options as a homeowner during a foreclosure or if your mortgage is underwater. This way, you’ll have a clearer understanding of what you can do!

What is a Short Sale and How Does it Benefit You?

A short sale can be a smart way to mitigate foreclosure (here’s a great definition of what a foreclosure is in case you’re not sure) on a mortgage, although they can be difficult to attain in today’s market, they often prove to be a simpler way to resolve any debt leftover from a loan.

Short sales were really common in the market a couple of years back when the flood of foreclosures hit the Metro Detroit market… but as foreclosures have slowed down and home values have climbed back up a bit… lenders are a little less likely to offer a short sale as an option as they used to be (but they are still doing a lot of them!).

Here Are A Few Reasons You May Want To Consider Short Sale On Your Metro Detroit Home

1. You Avoid Foreclosure And The Harmful Effects

The most significant benefit of opting for a short sale is that it can help you steer clear of foreclosure on your home. This process involves your mortgage lender agreeing to accept a sale price that’s less than the amount you owe on your mortgage, which ultimately allows you to break free from the debt that has become unmanageable.

It can be a lifesaver for many homeowners facing financial difficulties, as it not only helps you avoid the long-term consequences of foreclosure but also gives you a chance to start fresh. Plus, a short sale can be less damaging to your credit score compared to a foreclosure, making it a more favorable option in tough times.

Foreclosure can lead to all kinds of financial problems, starting with the inability to obtain a new loan for a home because a foreclosure stays on your credit record usually for up to 7 years.

Even renting will become more difficult as your credit score would be affected, and you often have to disclose a foreclosure on a rental application. Foreclosures can also last a long time (up to 7 years as mentioned above), making you wait years to even qualify for a new mortgage.

2. Credit Worries

When you’re staring down the barrel of a foreclosure, the effects on your credit can be pretty devastating. Not only does it significantly lower your credit score, but it can also make it incredibly challenging to secure financing for big purchases in the future, like buying a car or renting a new home. Traditional banks and lenders often view a foreclosure as a huge red flag, making it difficult for you to get approved for loans or leases. This can leave you feeling stuck and frustrated, as you might find yourself facing higher interest rates or even being denied outright. It’s a tough situation, but understanding the long-term implications can help you take steps to protect your financial future.

Plus, if your job involves handling money, you could even risk losing your job if your employer takes that kind of thing seriously (though most don’t, it can happen).

On the flip side, opting for a short sale can be a real lifesaver when you’re grappling with mortgage debt. It allows you to relieve the burden of your mortgage, helping both you and the bank to move forward. The best part? A short sale is generally less damaging to your credit score compared to a foreclosure. Instead of having a foreclosure marked on your credit report, you’ll just see a pre-foreclosure status, which is much easier to bounce back from. This means that once the process is behind you, you’ll have a better chance of rebuilding your credit and getting back on your financial feet in the long run. It’s a more favorable option for those looking to recover from their financial troubles without facing the long-lasting repercussions of foreclosure.

3. Buying a New Home

A foreclosure can last for a long time, making it impossible to purchase a mortgage again for up to 7 years.

Short sales offer more flexibility for sellers, allowing new home applications as little as two years after filing, depending on the bank. This can make it easier for mortgage lenders to approve your loan compared to a full foreclosure, helping you get back into a new home faster.

Again, this all depends on the actual bank / lender you’re working with… so if they’re giving you a hard time a year or two after a short sale… shop around and find another bank to work with.

4. Usually No Fees Involved

One of the key advantages of pursuing a short sale is that you typically won’t face any fees from the bank during the process. Banks are often eager to remove the loan from their books, and if you can demonstrate that your home is “underwater” (meaning you owe more than it’s currently worth), they may be more inclined to negotiate a short sale instead of initiating a costly foreclosure. This can lead to a smoother process for you, as the bank may recognize that working out a short sale is more beneficial than dealing with the expenses and time involved in foreclosure proceedings. By presenting your situation effectively, you may find that the bank is willing to cooperate, making it a win-win for both parties.

With a foreclosure, your mortgage lender may add extra fees that only worsen the situation.

It’s important to be aware that some real estate consultants may charge fees to assist with the short sale process and facilitate communication with your bank. Before you decide to work with a real estate agent or firm, make sure to clarify any potential costs involved. This way, you can weigh your options more effectively and avoid any unexpected expenses as you navigate the complexities of a short sale. Always ask for a detailed breakdown of any fees they might charge to ensure you fully understand the financial implications before moving forward.

Our company, We Buy Houses in Detroit, can help guide you on how to improve your chances of getting your bank to approve a short sale for your home…. so connect with us by calling (313) 246-4551 or shoot an email to us through our contact page here.

Getting a Short Sale – What You Need To Provide

To initiate a short sale, you’ll need to provide the bank with proof that you’re struggling to keep up with your mortgage payments. This process can be complicated, so it’s wise to consult with a local real estate attorney who is well-versed in this area of law. They can help you navigate the requirements and ensure that you’re submitting the necessary documentation accurately, increasing your chances of a successful short sale. Having legal guidance can also help protect your rights throughout the process and make it smoother overall.

If you’re unsure about whom to contact or whether a short sale is the right option for you, don’t hesitate to reach out to us! We’re here to discuss your situation at no cost and help you explore your options. Our team can provide valuable guidance and tips without any strings attached, ensuring you have the information you need to make the best decision for your circumstances.

Sometimes, we can even take care of the paperwork for you or purchase the house directly, allowing you to move on from that mortgage seamlessly. This could be a fantastic option to consider if you’re looking for a quick and stress-free way to relieve yourself of your current situation!

One More Thing…

It’s in our best interest to give you the highest possible offer.

Why? Because we make a profit by buying, renovating, then selling homes. 

To do that, we need homeowners to accept our offers. 

That means our #1 job is to build trust and create win-win solutions with the homeowners we work with. That means giving you the highest possible offer.

So our philosophy is that we both win, or nobody does.

And that also means NO lowball offers, NO sales pitch. And NO high pressure.

Cash For Home – We Buy Houses in Metro Detroit

We buy houses all over Metro Detroit, and we’re here to help homeowners like you who might be having trouble selling the traditional way—or who just don’t want to go through the usual route of listing with an agent.

Feel free to reach out anytime to chat about your situation. We’re here for you!

If you’d like to see what we can offer for your house, just click the link below and fill out the form on the next page. We’ll get back to you with a no-obligation cash offer within 24 hours. This way, you’ll know if it’s a good option for you!

Get A Cash Offer On Your Home Here >>

We Buy Houses Metro Detroit. Because we pay cash, we’re able to close quickly or on your schedule. No listings. We want to EARN your business!

Since we’re cash buyers, there won’t be any listings, no commissions, you don’t have to make any repairs, and there’s ZERO cost to you.

No risk. No obligation. No hassles. If you’re looking to sell a home anywhere in Metro Detroit we should have a conversation.

Call us today at (313) 246-4551.

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