Short sales are a last resort for home sellers trying to avoid foreclosure. For struggling borrowers, a short sale could really offer the only chance to avoid foreclosure and all of the financial repercussions that can go along with it. While short sales still ding a borrower’s credit, it can be better financially to sell a house in a short sale than to go through foreclosure.
That being said, short sales are still stressful, time-consuming and complicated. Here are five tips to help you successfully navigate the process of short selling a home.
- Pick your short sale team. Like the purchase of a home, a short sale is not a process you should go through alone. You should work with a team of short sale experts, which includes a real estate agent, real estate attorney, and your accountant. Interview several people for each position on your team and evaluate them carefully. Remember that you’re placing some of your financial future in their hands. Pick the best you can afford.
- Understand the financial implications of short sales. What happens to your mortgage once a short sale is over depends on several factors. It's important for borrowers to fully understand whether the lender has agreed to waive the mortgage deficiency from the sale price or if the balance of the loan that is left after the sale will be due. You can try to negotiate your way out of a deficiency or try to avoid a deficiency judgment by pursuing a short sale through the Home Affordable Foreclosure Alternatives program, or HAFA. Either way, there will...