Pros & Cons of a Short Sale:
When entering the world of Real Estate whether you are an agent, a homeowner or a prospective buyer. You may hear many terms that you have never even heard of or have no clue what it means. One of those terms is a short sale. In Real Estate, a short sale is in which the price of the home being sold is a lower amount than the price of the seller’s mortgage..
A major reason for a short sale to occur could be that the current seller is unable to pay for their mortgage resulting in a need for money before having to deal with major problems from the bank. Short sales can also occur due to the amount of money that was not paid to the bank.
There are plenty of pros and cons when going into a purchasing or selling a short sale home. If you don’t mind getting through some extra red tape then some advantages range from a short sale can be beneficial to the buyer in which they have the opportunity to find an astonishing deal. As a buyer, you can get a good deal for quick & easy equity as well as an empty unit if you are looking to become a landlord. As a seller, the advantages are that you are able to eliminate mortgage debt as well as avoid the negative impact of a foreclosure. A foreclosure puts a negative strain on your credit so you can start increasing your credit faster by avoiding that. It is also beneficial to sell as a short sale because you are able to get a Fannie Mae loan as soon as 2 years while a foreclosure can lead to up to 7 years or more of not being approved for a mortgage. Get up to $3,000 in relocation aid in select instances.
While the benefits of purchasing a short sale as a buyer or as a seller seem like an advantage for all parties. There are still disadvantages, in order to avoid walking away from a foreclosure, you must assume responsibility for the sale of your house. The approval procedure could take some time. Both a short sale and a foreclosure may have tax repercussions. Documentation issues are one major cause of short sales that fail to close. For instance, the paperwork could not be written out on deadline, be lost, or not be properly signed and dated. Short sales also take longer to close on. A regular sale is closed in as short as 45 days or less while a short sale can take up to 120 days. Lastly, the home may not be worth it as it could be a fixer-upper and need tons of maintenance. If the benefits outweigh the disadvantages for you then you should definitely look into a short sale. When it comes to the world of Real Estate you have to always do what is most beneficial to you and check off all the boxes for you.
Looking to buy or sell your home on Staten Island? For all your real estate needs, look no further than Tom Crimmins Realty! Give us a call at (718) 370-3200, and we can provide you with professionally-trained agents who are flexible to all that you’re looking for!
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