There is a lot of misleading and incorrect information about Chicago real estate short sales.
Many people don’t have a clear understanding of the purpose of short sales or how they actually work.
Essentially, a short sale is when one sells their home for less than the balance remaining on the mortgage attached to the property.
The proceeds from the sale are used to repay a pre-negotiated portion of the balance to settle the debt.
A short sale can be a solution for homeowners who really need to sell their home but owe more on the mortgage than the home is worth.
Understanding the short sale process can help make the most out of a real estate sale.
Here are some common myths and why they are false:
A short sale damages one’s credit record as much as foreclosure
In many cases a short sale is less damaging to your credit record than a foreclosure. Some lenders may think that the short seller acted in a more responsible manner than simply walking away from the property.
Although the amount paid may have been less than the mortgage balance outstanding, the loan was settled with the lender. Opting for foreclosure is often seen as a lack of responsibility.
To qualify for a short sale one must be behind on payments
This might have been true in the past, but it’s not anymore.
You just need to be able to prove that you are in financial hardship, which could be due to death in the family, divorce, job loss, mortgage rate hike or even loss of property value.
After a short sale you can’t buy again for five to seven years
This may be true in some cases, but not all. In certain situations the waiting period can be reduced as low as two or three years before you are allowed to purchase another home.
It would be wise to speak with licensed real estate professional or home financing specialist to get the most current options in the marketplace.
Pass it on
These are just a few examples of commonly believed short sale myths. A clear understanding of the short sale and the benefits it can provide is important for financially strapped homeowners.
Feel free to pass this important information on to someone that you feel would benefit from it.