Very interesting and valid points in this post by Marcus Rice. Many are faced with the difficult task of deciding what to do when their home is in foreclosure.
SHORT SALE RICHMOND VA - CDPE REALTOR - SHOULD YOU SHORT SALE OR FORECLOSE?
Why would a bank or mortgage lender want to do a short sale?
A common saying is that banks are in the business of lending money and do not want to own real estate. This is slightly misleading but is essentially true. When a bank takes a property back via foreclosure, it is a long and expensive process and often results in holding the property in their inventory as a non-performing asset. Banks have a limit to the amount of non-performing assets they want to hold. Once this limit is exceeded, they have strong incentive to get rid of the properties at discount prices.
For a lender, doing a short sale avoids many of the costs associated with the foreclosure process. Attorney fees, delays from borrower bankruptcy, damage to the property, costs associated with resale, property tax, insurance, etc. all must be paid by the bank during a foreclosure. In a short sale scenario, the lender is able to cut its losses by getting rid of the property faster.
Will a short sale "save my house"?
In the sense that you will be able to continue to live in the house, unfortunately the honest answer is no. A short sale is only done involving a legitimate sale of the home from the foreclosed owner to another unrelated party.
Many of the cards and letters you have gotten have probably promised to save your house, however this is very seldom possible. We would recommend that you NEVER sign away your deed to someone who promises to "save your house" from foreclosure. It is probably a scam.
Will a short sale "save my credit"?
The short answer is yes and no, a short sale can save you from the worst credit disasters.
By defaulting on mortgage payments and having a foreclosure filed against your property, you have already done damage to your credit. Your credit score has declined and those negatives will stay on your credit report for some time. However, it will get much worse if you allow the foreclosure to continue and do not try to short sale the property.
Once a foreclosed property is sold at auction, your credit score is further reduced and when the foreclosure is completed via eviction and repossession of the home, your credit will be even further damaged. If you can complete the short sale BEFORE either of these takes place, then you can prevent that further damage to your credit. In addition, when the short sale is completed, it shows up on your credit as a "Paid" mortgage and a canceled foreclosure, which shows future creditors that you did take care of your obligations.
If your situation eventually winds up in bankruptcy, then that is the worst item that could appear on your credit report and it will remain there for years and cause numerous difficulties in getting future credit. A short sale can help avoid this, but the key is not to wait.
Please contact Marcus for a free consultation and we will work with you to either help you save your home or sell it For more info call 804-247-8187
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The Marcus & Tonya Rice Team specializes in Richmond, Va, Henrico County, Chesterfield County, Powhatan County, Hanover County, Petersburg, Colonial Heights, and Fort Lee Homes and Real Estate for sale. We are tech savy realtors with over 11 years experience. Please join us on our Social Networking Network to stay up to date on Richmond Virgina real estate news and more...
The Marcus Rice Team can be reached at 804-247-8187 or firstname.lastname@example.org
The Marcus Rice Team
13204 Hull Street Rd.
Midlothian, VA 23112
Call Marcus at 804-247-8187