Short Sale: Advantages and Disadvantages

By
Real Estate Agent with Nicholas Real Estate

Most people are familiar with the term short sale by now. Well, Not all because I have seen some realtors who does not know what they are yet. I kind wish i was one of them sometimes! That means they didnt deal with any short sale. :) I  think most realtor would agree with me that short sales are a pain in the neck! There are homeowners who are trying to modify their loan, but do not qualify for it. In my Opinion, their next best option might be short sale. Of course, this is case by case. I am sure an bankruptcy attorney somewhere there will disagree with me.

Some benefits of a short sale

·  You are in control of the sale, not the bank.

·  You may sleep better at night knowing who is buying your home.

·  No social stigma of the "F" word, (foreclosure)

·  If multiple unit property, you might stay paying rent to the new owner

·  Your home sale will be handled like any other home sale.

·  All lenders report short sales differently and some do not report them to the credit bureaus at all, but most of the time, short sale will show as SETTLE on your credit report

·  Judgments are often negotiated between the seller (realtor) and the short sale bank

·  You might or might not be issue a 1099 on the defficiency (you dont have to pay tax on your primary home)

·  LESS COSTLY

·  You could buy a house after 2 years according to HUD

·  Your credit score starts raising after you sale (settle the debt)

·  BEST of All, You will have Peace Of Mind (POM POM)!  STRESS FREE and You wont be paying for a Under Value Property

Disadvantages

Comparing to Foreclosure the disadvantage is minimum

·  Yur credit score drops, this is because you were late

·  You wont have your house

·  Might have to pay taxes on a secondary home or  investment home

Anything else you could add! Please comment on it!

If I can be of any help, Please let me know as well!

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Rainer
19,670
Kristin Larson
Troy, MI

good info indeed

Jan 14, 2010 07:48 PM #1
Rainer
38,117
Mark & Elly Ostrovsky
Howard Hanna Smythe Cramer - Beachwood, OH

Thanks for your realistic insights into the short sale process. Many forget to mention the downs along with the upside.

Jan 14, 2010 07:50 PM #2
Rainmaker
329,516
Roy Giordano
RE/MAX Central, Marlboro, Manalapan, Freehold, Old Bridge NJ - Marlboro, NJ
Top Agent Marlboro NJ, Marlboro/Manalapan Homes

Hi Hugo, Nice blog. Some excellent points here regarding the short sales.

Thanks for posting,

Roy

Jan 14, 2010 08:54 PM #3
Rainer
18,231
Hugo Meza
Nicholas Real Estate - Clifton, NJ

Thanks for the complement Mark,Carl n  Roy!

Jan 16, 2010 04:14 PM #4
Rainer
15,673
Freddie Gonzales
WEM PACIFIC Investments, Inc. - Daly City, CA
CRS, GRI, RDCPro

Hi Hugo,

I guess the positives outweigh the negative. It is the reason why banks are approving short sales faster nowadays compared to 6 moths prior and beyond. Short sale will be the wave and more short sale will be approved and less REO's as banks fare out better with a short sale than an REO,

Jan 21, 2010 09:37 PM #5
Anonymous
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Rainer
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Hugo Meza

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