Short Sale vs. Foreclosure

Short Sale vs. Foreclosure

Deciding whether to short sale vs. foreclose requires analyzing many different details.  There are a large number of homeowners who have been led to think that the perfect way to avoid the hassle of a short sale is to allow the home to foreclose and walk away free from a mortgage without owing a dime.  Much of this type of thinking is based on not knowing all of the relevant information and depending on your situation you could be left with a large lawsuit and judgment against you from your lender.

This theory gained traction simply because of a lot of confusion  has occurred when it comes to strategies used in real estate and California law.  We have seen countless people in our office after a  foreclosure who are getting sued, yet had no idea or were misinformed about the fact that they COULD get sued after a foreclosure.

Short Sale

Short selling is an option some homeowners use when the bank, credit union or other type of mortgage lender they have borrowed from provides them with the option of selling their home to a third party at a price that is much lower than what they actually still owe on the note of their mortgage. The short sale process is one that is often used by homeowners who are trying to avoid getting caught up in a foreclosure or who no longer want to retain their home. Thus, receiving approval from the lender to short sale allows them the opportunity to sell their property at a significantly lower rate. It is also important to compare short sales and foreclosures to ensure you are making the right decision.

To most people, it sounds rather strange for any type of lender to be willing to accept a lower amount from homeowners than what they truly owe on their home. There is more than just one reason why a bank chooses to accept short sales. The key reason is, simply put, that a short sale costs them much less than what a home foreclosure would. The expense banks already have to consider from foreclosures is astronomical. They will also be able to supply you with information in regards to benefits received from short sales. However, when they provide homeowners with the option of short selling, they are then able to recover at least a partial amount of what they would otherwise completely end up losing. When a bank has several mortgages that are non-performing, the Federal Reserve will often lower the amounts or even suspend funds they provide to these lenders.

Foreclosure Consequences

It is important to understand that a foreclosure has many consequences in addition to losing your home. Your credit rating will suffer for as many as 7 years causing you to pay high interest rates and difficulty financing another home in the future. Future lenders will know you lost a home previously to a foreclosure and this increases the wait time to buy again over the wait times with a short sale.

So what can you do to avoid all of these negative consequences? A short sale. This is a great procedure which allows you to sell your home below the market value.

Sacramento Short Sale Attorneys

We know Short Sales. Currently we have negotiated over 500 short sales since 2008 and we have been involved in assisting Realtors or others in some capacity in hundreds of other short pay transactions (short sales, settlements, etc.). We have more experience in this area than any other attorney or Realtor that we are aware of. This does not include our experience negotiating hundreds of loan modifications prior to 2009 when we stopped accepting those cases and advising thousands of our real estate and bankruptcy clients on their loan modification trials and tribulations with their lenders.  Not only do we understand California law as it applies to mortgages, short sales, lender behavior and requirements, but we know how to get issues resolved and escalate them if the lender is not behaving.

We are experienced Sacramento Short Sale Real Estate Attorneys and Sacramento Short Sale Realtors. We are a unique and powerful combination and can help you with your real estate legal issues and short sales.  We have helped thousands of people with pressing real estate issues find solutions and relief through the use of short sales, deed in lieu of foreclosures, strategic foreclosures, mortgage debt settlements and legal real estate review and advice.  

Our short sale real estate attorneys have achieved proven results and can give you the great legal advice and strategy needed to get you the results you want. Contact us today to schedule your complimentary attorney consultation by clicking HERE or by calling 916-999-1376. We look forward to helping you with all of your Sacramento short sale real estate needs.