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A short sale is designed to help sellers possibly save their credit. The best time to work out a solution like a short sale is just after a homeowner misses a payment and sees no way of catching up. With a real estate agent’s help, the homeowner may be able to sell their property for less than the amount owed to the bank and walk away from the situation without any cost to them self. This is called a Short Sale, and most banks are willing to accept this kind of arrangement and pay the realtor involved a commission, since foreclosures are usually much more expensive than accepting a lower payment. The decision to negotiate a short sale will allow the seller to rebuild their credit sooner. Foreclosure has the most damaging effect on your credit rating, even worse than Bankruptcy. A foreclosure on your property will remain on your credit report for ten years whereas a short sale will show as a "charge off" which will allow a seller to purchase another home within two years. Although proper filing of a Chapter 13 Bankruptcy can stop a foreclosure; failure to make payments gives the creditor the option of restarting the foreclosure when it left off before the Chapter 13. For some people the Short Sale is a much better choice to get a fresh start. Your lender will want a complete financial statement and an explanation of your situation justifying your request for mortgage relief. The following situations are considered hardships for the purpose of negotiating a short sale with the help of an agent: Unemployment Divorce Medical emergency / sudden illness Bankruptcy Death A short sale can offer a softer financial landing than bankruptcies or Foreclosure Process.When negotiating a Short Sale,you can require that the bank waive its right to a deficiency judgment and in most cases the lender is responsible for all the costs of the sale of the home.For home sellers who owe the lender more than their home is worth negotiating a short sale with the lender could be the solution.
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