What is a Short Sale?
It’s important to understand exactly what a short sale is before considering one. Sometimes mistaken as just another term for a foreclosure, a short sale is actually very different. Phoenix Homeowners who short sell are generally trying to avoid a foreclosure by working out a deal with the bank. Contrary to popular belief, in this case the bank actually wants to work with homeowners, as a foreclosure is a lengthy and very expensive process for the bank.
It’s also important to understand what “short sale” refers to. It’s a common misconception that it refers to a short period of time to sell but in truth, it means the seller has come up short on paying off the loan. Short sales can actually take a very long time to close because the buyer and seller have to negotiate on a price, which then has to be approved by the bank. This approval can take quite some time, even longer if the bank rejects the first offer.
What are the Drawbacks?
Less than a quarter of short sales actually close. One of the primary reasons for this is the back and forth between the sellers, the bank and the buyer can be frustrating. Many buyers tend to get fed up with this process and simply walk away. Banks work hard to streamline the process and make it easier, but in the meantime, it’s important to know what you’re getting into and that it can be hard to complete a short sale. Here are just a few reasons why short sales often fall through:
- Unreasonable second lenders
- Home is vacant
- Demands for seller contributions
- Tax liens
- Bank offers loan modification
It can be easy to forget about the secondary lenders during the process, but it’s absolutely vital to keep them involved. Having a second home equity credit line or mortgage means those lenders need to approve the short sale in addition to the primary lender. This can make the process more difficult, but leaving the junior lender out of the loop can and likely will lead to bigger difficulties down the road, slowing the process down further.
Short sales are generally a desperate solution for those in dire financial straits and a short sale can have a powerfully negative impact on your credit, so it should be a last resort. All Homes AZ is an excellent alternative to hosting a short sale. No matter your situation, All Homes AZ is willing to work with you. Times are tough, so don’t let a short sale drain your savings! Save your credit score and get cash for your home today with All Homes AZ’s fast and easy services! Contact us online to get a free consultation!
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