Are Short Sales Really Worth It?
By now, nearly everybody has heard the term “short sale”, and most have a general idea of what they mean. There are also a lot of horror stories floating around, most realtors who have been doing short sales for over a year could tell you atleast a few! The fact is, a short sale does require cooperation from the homeowner, which includes collecting documents, financials, writing a hardship letter, accommodating showings and more. Sometimes, a bank may go back and forth requesting additional documentation and explanations, ordering additional appraisals—all which involve the homeowner. Sounds like a lot of work, so why would a homeowner go through with a short sale instead of foreclosing?
You may have heard that the benefits include: the ability to obtaining future financing in a much quicker timeframe and credit score & credit history benefits. In addition, doing a short sale is extremely important for homeowners who need a Security Clearance such as police officers, military, CIA, as security clearances may be revoked with a foreclosure. Many employers now also run credit checks, in which a foreclosure may challenge possible employment.
Our office recently got a call from a couple who had relocated here from the East Coast. There move was a necessary one due to a job transfer, and they were forced to go through a short sale in the state they moved from. They did remain current through the short sale process, which helped save their credit score. When they arrived in Scottsdale, they immediately sought mortgage financing in an effort to buy a home instead of renting. They were very happy to hear that they would be able to immediately purchase a home due to the fact that relocation was necessary as well as they had no late payments.
Now that HAFA has been released, short sales may be even more favorable. HAFA, is a government program also known as the Home Affordable Foreclosure Alternatives. Here's the short and sweet of it: HAFA offers incentives to lenders and homeowners who avoid foreclosure through short sales and deeds-in-lieu. HAFA also sets timeframes that ensure lenders don't drag their feet in responding to homeowners.
These two aspects of HAFA will be motivating a lot of homeowners to fight foreclosure. Knowing how badly widespread foreclosures can damage a community, I hope the program is well received.
To answer my question, I do believe short sales are worth it. I believe the benefits of a successful short sale far outweigh the hassle of the paperwork. In Short Sales, the Homeowner is in control over the transaction—unlike in Foreclosures where the Bank is in the driver seat. With the process getting more streamlined and organized, we should see short sale transactions go much smoother. The last short sale approval I got (GMAC) was a little over 2 weeks!
If you want to find out who is eligible for HAFA, or if anyone you know is facing foreclosure and needs qualified assistance, please contact me right away. I also have a report available (http://www.azforeclosurehelptoday.com/) with the solutions that can help.
Jennifer Wehner