It wasn’t that long ago when homeowners scoffed at the idea of a short sale and buyers were too scared of the idea to put in an offer. These days short sales are becoming more commonplace and many are finding they can offer good benefits in a bad situation.
For homeowners with an underwater mortgage or overwhelming mortgage debts, getting rid of the home through a short sale is a far better deal than ending up in foreclosure. In many cases, homeowners in these positions have little chance at securing a loan modification or other solution. While a short sale is not a first choice for many it can benefit the homeowner by allowing them to get out from under a sinking mortgage or drowning in debt, protect their credit from the stigma of a foreclosure and allow them to have a chance at a new mortgage sooner rather than later.
For the lender who owns the loan that is either significantly delinquent or exceeds the current value of the home, a short sale offers a better chance at recouping the lost loan amount. Studies have shown that lenders are more likely to regain an amount closer to the principal owed on the loan through a short sale than through a foreclosure. On average, a short sale can yield a 30-40% higher amount than a foreclosure. Lenders also have less to do in a short sale, as the homeowner takes the responsibility for most of the work in selling the home.
For the buyer who is looking for a great deal on a home, a short sale can be just the answer. Unlike foreclosures, short sales are kept in good condition and rarely left abandoned or requiring much work. Buying a short sale can yield a bigger and better home for the same price as a home of lesser condition. Many buyers have made taking short sales into consideration a priority, one that often pays off with a little effort and patience.