It’s likely you’ve heard the term “short sale” thrown around quite a bit. But what, exactly, is a short sale? A short sale is when a bank agrees to accept less than the total amount owed on a mortgage to avoid having to foreclose on the property. This is not a new practice; banks have been doing short sales for years. Only recently, due to the current state of the housing market and economy, has this process become a part of the public consciousness.
To be eligible for a short sale you first have to qualify! To qualify for a short sale:
- Your house must be worth less than you owe on it.
- You must be able to prove that you are the victim of a true financial hardship, such as a decrease in wages, job loss, or medical condition that has altered your ability to make the same income as when the loan was originated. Divorce, estate situations, etc… also qualify.
Now that you have a basic understanding of what a short sale is, there are some huge misconceptions when it comes to a short sale vs. a foreclosure. We take the most common myths surrounding both short sales and foreclosures and give a brief explanation.
LET’S BUST SOME MYTHS!!
10 Myths About Short Sales/Foreclosures:
- If you let your home go to foreclosure you are done with the situation and you can walk away with a clean slate. FALSE!
- There are no options to avoid foreclosure. FALSE!
- Banks do not want to participate in a short sale, or, it is too hard to qualify for a short sale. FALSE!
- Short sales are not that common. FALSE!
- The short sale process is too difficult and they often get denied. FALSE!
- Short sales will cost me money out of pocket. FALSE!
- If I am behind on my payments, I can perform a short sale any time. FALSE!
- I have already been sent a foreclosure notice so I can’t perform a short sale. FALSE!
- I was denied for a loan modification, so I know I will get denied for a short sale. FALSE!
- If I go through a short sale I cannot buy another house for a long time. FALSE!
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If you’ve been under the wrong impression and need a source for finding some accurate information regarding your options, contact us today and we’ll be happy to help you figure out what the best option is for you!