Short sales happen when a home is sold for less than the mortgage owed by the homeowner on it. The proceeds of the short sales go to the lender. The lender will accept short sales even at a loss since having the property go into foreclosure will actually be a greater loss for both lender and seller. A St. Petersburg short sale is therefore a better alternative to a foreclosure and has many benefits for the seller.
1. Avoiding Foreclosure. A short sale is an alternative to foreclosure. This helps lessen the damage to your credit. Although you must bear in mind that your missed and late payments will still reflect in your credit. Nevertheless, a short sale is still more beneficial to you than a foreclosure.
2. Avoiding Deficiency Judgments. In some states, your lender could require you and legally hold you liable to pay the amount you still owe after a foreclosure.This is called a deficiency judgment. In a short sale, it is possible to negotiate a release with the lender and have them agree not to pursue you for any deficiency as part of the short sale. This could be the biggest benefit to the seller of a short sale.
3. You get to live in your home without having to pay your mortgage. At least for the duration of the short sale process, that is. Short sales usually take a long time since you have to prepare and organize your short sale package, submit it to the lender, wait for an approval, list the home as a short sale, wait for a buyer’s offer, and close the deal. The months it takes for this entire process equates to time you get to live in your home without having to pay any mortgage. This could be the perfect time to build up a financial reserve so you won’t fall into the same financial hardship in the future.
4. You get a sense of closure. Losing your home due to financial hardship can take its toll on you emotionally. One benefit of a St. Petersburg short sale is that it gives you a sense of closure to your home. During the months it takes to process the short sale, you will have enough time to adjust to your new financial status and you get a clear idea of when you will have to leave your St. Petersburg home.
5. Leaseback Opportunity. A short sale may give you the chance to stay in your home in case you find a buyer who is willing to agree on a leaseback setting. In this deal, the buyer purchases the home at a discount as a short sale and leases it back to the seller at a lower payment. Some leasebacks even have a buy-back option which allows the tenant to buy back the home from the new homeowner.
These are just some of the benefits of a short sale over a foreclosure. If you need help with your short sale, call us to speak with one of our highly skilled short sale agents / realtors and we will help you through the entire process of the short sale.