This blog post is directed to home owners as well as real estate agents as well. I recently have had multiple conversations with owners about the information that they heard from friends. That was the first problem. Be very careful who you get your information from! I would never call an accountant and ask why head hurts, so why would someone listen to your primary care doctor, about real estate advice? There is a lot of bad information going around about short sales and loan modifications. The first is that Loan modifications work because they don’t. I’m not saying that you can’t get a loan modification but what I am saying is that it’s not going to be what you expect and there is a lot risk in trying for one. If you are one of the lucky (2%) of owners that actually get a loan modification you most likely aren’t going to get a principal reduction! You won’t be alleviating any debt with this option. When you are doing a loan modification you will need to miss payments in order to qualify for one. The risk is that when you are missing payments on your house, generally the bank will treat it just as if you’re a homeowner who stopped making payments. They will file a notice of trustee sales after you’ve missed 3 months of payments( normally but not always) and then they may or may not postpone that trustee sales date (Arizona doesn’t foreclose we have trustee sales). You take the risk of losing your house when you do a loan modification and a lot of people don’t realize that.

I also talked with someone doing a deed-in-lieu. Which is essentially deeding your property back to the bank so they don’t foreclose. The harsh reality of this option is that it doesn’t help the owner at all. It hurts you just as bad a foreclosure does on your credit. All you are doing is helping the bank out.

Which brings us to short sales. These are my favorite option and not because I am a real estate agent who has been doing short sales for the past 7 years but because it helps owner to alleviate debt. When you have a short sale on your credit and not a foreclosure, it positions you to rebuild your credit quicker. It also puts you in buying power sooner to purchase a new home. When you purchase that new home you will be able to enjoy the appreciation in value instead of waiting for the nest 10 years for your equity to get to ZERO!

Now with government programs you may qualify to get paid 3,000 or more to do a short sale. That’s on top of not having to pay a real estate agent to sell your house. Now more than ever you have the ability to get rid of the negative equity in your home and position yourself for a brighter future. We have more information on our website so look around and enjoy.

Most of us are still suffering after effects of financial crisis and staying current with mortgage payments is difficult these days. This at times results in inevitable foreclosure but the good news is that there is an alternative to bankruptcy and foreclosure- short sale. However, it can be one of the most difficult decisions for many people but might be the only option for you. Short sale certainly makes financial sense for people in such a situation. People might have concerns about choosing the short sales than going through foreclosure. It is smart decision to take the measures to get out of the situation than to do nothing at all.

If you are already underwater, meaning you owe more money than value of your home or you are not able to sell it due to negative equity, contact the lender and check out the options that you have. Keeping all the options in mind, you can make an informed choice. Do not forget that lenders are not in favor of foreclosure as it is stressful for everyone involved in it. Though there is a damage to the credit with sale but it is surely not as bad as foreclosure. Such sale will help in avoiding purchase residence with mortgage backed up government for a span of 24 months. With foreclosure, period to qualify extends four to five years. And the worst part is that you will have to mention that you have had a foreclosure in the mortgage in the application. When making loan payment is monthly struggle and homeowners have huge negative equity amount, short sale can prove to be the best option.

In cases where homeowners are walking in eventual foreclosure, one clear advantage would be to utilize short sale. Such a sale would allow homeowner to purchase home much sooner and allow the family to rebound quickly. Despite of its negative influence on your credit, short sales makes financial sense in many cases.

So analyze your case well to see if it makes sense to invest time and efforts in short sales. In most of the cases, short sale is the best way out of the financial trouble.

Courtesy of Eureka Luxury Short Sales