Short Sale Advantages

Short Sale Advantages

Top 10 Short Sale Advantages and a huge "hint" that could save you money and headaches.
If you would like to know if you are a candidate for a Short Sale please use the Short Sale Request form here.
        
                       or for a side by side comparison Short Sale vs Foreclosure
                            from "Distressed Property Insistitute" click here
 
TOP 10 SHORT SALE ADVANTAGES 
1. You don't have to pay normal sales fees and you can afford to sell.  In a normal sale the Seller pays commissions, transfer taxes, HOA transfer fees, etc often adding up to 6% to 8% of the sales price.  But in a Short Sale the Lender or the Buyer pays for most of these.  You get to negotiate who pays for what thereby avoiding paying for almost anything.  Sure in foreclosure you don't pay either - but foreclosure has other disadvantages and does not allow you any control over your situation, or the ability to negotiate with the banks and your creditors. 
 
2. Notices of Default (NOD's), Auction announcements and properties taken back by the bank (REO's) are all publically recorded and announced documents and events - a Short Sale doesn't drag your name through the street like a foreclosure does.  In many cases the lender may post an Auction notice on your front door.  In a Short Sale you can avoid this kind of embarassment.
 
3. Often you're asked in job interviews or other applications if you ever had a foreclosure.  Yet no one ever seems to ask if you ever did a Short Sale.  There's a stigma to foreclosure that just isn't there for Short Sales.
 
4. Lenders will lend to you sooner after a short sale than a foreclosure.  There are caveats, but in general the rule is 2 years after a short sale, and 5 years after a foreclosure.  This could also change in the future, but right now, lenders will treat you more favorably if you have a Short Sale vs. having had a Foreclosure.
 
5. Related to #4, if you can get out now, you can buy back in sooner.  Some pundits believe prices will keep dropping due to a bad economy and because of other short sales and a lot more REO's coming.  If you believe home prices are going back up, and will keep going back up, then a Short Sale probably isn't for you.  But if home values do keep going down, the sooner you are credit worthy, the more likely you'll be prepared to buy back in when the time is right... or a time of your choosing... hopefully when the market is once again on it's way back up.  Think of it this way - if home values drop by 50%, you need the market to appreciate by 100% to get back to even.  The math works in your favor if you don't ride prices down further, but get to ride the wave back up. 
 
6.a. Short Sales are better for your neighbors as they usually don't sell significantly less than market value as foreclosures often do.  I had one Short Sale where the lender refused our offer, and 4 months later it sold as an REO (bank owned foreclosure) for $110,000 less.  So a Short Sale protects your neighbors value.  Yes, you can help your neighbors while helping yourself.
 
6.b. Short Sales are also better for your Condo Association and your building because they get a Dues paying member in faster (and don't have ANY lapse if you stay current on your dues) - so again, you are helping your neighbors
 
6.c.. The property will not be vacant if you or your tenants live there, whereas with REO's it's usually vacant for an extended period of time and therefore subject to vandalism and squatting (a bigger problem with single family homes than with Condos).  Vacant properties are often bad for your neighbors.
 
7.  Do the rent vs. buy calculation - if renting is cheaper than owning, you save money. And in San Francisco, chances are renting is much cheaper.  As a renter you also have flexibility you don't have as an owner - you can move almost any time, whereas right now you're pretty stuck aren't you?
 
8.  As stated in #1, you get to negotiate in a Short Sale and you hold the "bankruptcy card" in your back pocket.  The lender may threaten to go after you for your promissory notes (the loans) after foreclosure, or even after a short sale, depending on the type of loans you have, or your specific situation.  However, in a Short Sale, you get to negotiate, and the threat of filing bankruptcy is one of your strongest negotiation tools.
 
PLEASE NOTE - this is NOT legal advice and I STRONGLY recommend you speak to a Bankruptcy attorney AND a CPA before using any of this information.
 
9.  With a foreclosure on your credit report you may have a hard time getting any kind of loan from credit cards, to car loans, and in the future, there's a pretty good chance future lenders will look upon short sales more favorably then foreclosures.  Foreclosures also require you to stop paying your mortage (deed in lieu of foreclosure may not) which hurts your credit score.  So if you're able to stay current, or not have as many late payments during your Short Sale, you may protect your credit far more than a foreclosure. 
 
10.  You get a fresh start faster than an REO.  Controlling your destiny, and getting it done faster so you can start anew might be the #1 benefit of a Short Sale.
 
PLEASE NOTE - we are not attorneys and we do not know your situation, so you MUST consult with professionals, ie, an attorney and a CPA, before assuming any of the above is accurate, or appropriate for you.  We also have no insight into how FICO scores are calculated, and some believe Short Sales and Foreclosures are equally damaging to your score, whereas others believe Foreclosures are far worse. 
 
Sign up for a Short Sale review using our Short Sale Request form here.
 
HINT - print out all 3 of your credit reports and credit scores NOW.  If you have good scores now, you may find that proving you were a good credit risk UNTIL the real estate market turned upside down to future employers or landlords will save you money, time and hassles.   
 
To get your 3 reports and scores visit www.annualcreditreport.com (not the ones advertised on TV) for free copies of all three reports - and while there buy each score while at each of the 3 bureau's sites.  Buying individual scores while using www.annualcreditreport.com is usually cheaper than any other service or method.

Contact Information

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SFisHOME Real Estate Group
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San Francisco CA 94129
415-366-8218
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