You’re at your wits’ end. You’ve been having so many difficulties lately, that you’re hardly able to eat or sleep. No, it’s not love, good if it were. These have been financial difficulties, and the thought of losing your home to a foreclosure is almost unbearable. A short sale could do something for you.
What a short sale’s all about
A short sale means that you’re negotiating to sell your house to your creditor, whether a bank or a private lender, for an amount which still falls short of the actual amount you owe them. In return, this bank or private lender would agree to accept this form of payment even if its falls way below what they should receive from you.
How does it benefit your creditor
Before you think of how it’ll benefit you, you have to understand first how it will benefit the other party, and that’s why they usually go for it.
Most banks and private lenders are not really interested in foreclosing your house or in acquiring it. It will be a greater inconvenience, if not a headache on their part, to spend for getting your house and putting it in condition to re-sell it. Add to that the difficulty of disposing your house and finding buyers in the market with the current economic slump.
Another is that it will give them an opportunity to make a financial recovery despite losses from your non-payment or default on your mortgage loan. The amount they are able to collect may be deficient, but at least it’s better than what they would receive should you declare bankruptcy. To avoid the tendency of people to simply walk away from their obligations by declaring bankruptcy immediately, there are stricter laws now on filing for one.
How does it benefit you
This is the part you’re waiting for. Having gone on a secured loan like a short-term loan or an installment loan for paying your mortgage, you set up your house as collateral. You entered into a formal contract, and you’re obliged to pay in cash or in kind. Once they’ve accepted your offer for a short sale on your house and agreed that it will be sufficient payment even if it’s deficient or “short” in amount, then you are free of your loan. You won’t leave a trail of bad credit left hanging or unresolved. Have legal counsel present to make sure of this and put it on record for your own protection in the future.
What to do about it
You’ll definitely have to take the initiative. Approach you creditor and make a heartfelt application for a short sale. Explain your present circumstances and reasons for giving up your house through what’s called a hardship letter. Negotiate for the best arrangement you could arrive at, more preferably with the assistance of a lawyer who’s experienced in this kind of transaction.
A short sale will give you peace of mind. It will restore your health and ability to sleep. It will give closure to your debt problem. You can dream up a house some other time, when you’re good and ready.
Be better prepared by consulting Real Estates at
Payson Homes for Sale and
Prescott Area Real Estate. Learn more at
Flagstaff Real Estate.
