Why a Short Sale can be a Good Deal for Both Forsyth Sellers and Buyers
There are a few instances where a lender may accept a short sale on a property that a Forsyth homeowner is trying to sell while they still have a mortgage. A short sale occurs when a homeowner is unable to get an offer for the amount that they owe on the mortgage and a lender agrees to allow them to sell the home for less than what they owe. It is not a common practice since the lender loses out on the rest of the loan amount. However, some lenders do work with Forsyth homeowners if they are in a bad financial situation.
Facing Foreclosure
Even though a short sale does not benefit the Forsyth homeowner or the lender it can be better than allowing a house to go into foreclosure. Foreclosures happen if a homeowner is unable to pay their mortgage and they are not able to work out a payment method with the lender. Once the foreclosure is complete the lender will have possession of the property and the owner will need to move.
A lender will sell a foreclosed property. In this situation, they are not likely to get the full amount owed to them. If this happens, the borrower may face a deficiency judgment that allows the lender to go after them for the remainder of the loan amount. Lenders are not interested in losing money on a mortgage and like to avoid foreclosures or short sales when possible.
Borrowers that have a mortgage that goes into foreclosure will see this appear on their credit report. Their score is going to be negatively impacted and they will have a long waiting period before they are able to pursue another mortgage. This can be up to five years. Short sales do not put this stipulation on a homeowner and it allows them to avoid impacting their credit score to the same extent.
Why a Short Sale is a Good Option for Sellers
A Forsyth homeowner is going to have a much better chance of getting a new mortgage and keep their credit score intact if they use a short sale versus a foreclosure. They also have the ability to sell the Forsyth home on their own terms so they do not need to rush to get their belongings during the foreclosure process.
Once a foreclosure is complete, the Forsyth homeowner must move from the property. A short sale allows the homeowner to stay until the sale is final. During a short sale, the homeowner does not need to worry about the real estate agent commission because the lender will end up paying these costs.
Why a Short Sale is a Good Option for Buyers
A Forsyth buyer who does not mind putting in some work on a house may get a huge deal on a house during a short sale. The one caveat is that buying a house as a short sale is a much more complicated process than buying another property. There is a lot more paperwork to sift through and there will be long periods of time where nothing is happening.
Lenders do not like short sales and they are trying to get the most out of the deal that they can. They are likely to make their own demands about the sale to try to avoid paying as much as they can. This helps them offset their loses on the property.
There is little negotiating with a lender during a short sale. But it never hurts a Forsyth buyer to attempt to get a better deal.
The process of a short sale is not a good experience for a Forsyth homeowner. They are in a tough financial position and they are facing the loss of their home. But utilizing a short sale can save them from being kicked out of their Forsyth home, allow them to sell it, and avoid ruining their credit in the process.