When a homeowner signs for a new home, he/she don’t even think that they will ever face a foreclosure. But, some life emergencies, economic downturn, or realtor market crash forces the homeowners into the stressful process of losing their homes.
Foreclosure is quite damaging to the homeowner’s assets, savings, and credit score. But, a short sale is an alternative to this disastrous process that allows the homeowners to sell their home for less than what is owed.
Before knowing how to do a short sale in NJ, discover some of the advantages of short sales over foreclosures:
Short Sale Helps The Homeowners Take Control Of The Situation
Foreclosure is an arduous and stressful process for the homeowners. The mailbox starts overflowing with demand letters, documents, or constant exchanges with the lender’s team ensue.
While short sales in South Jersey also involve negotiations, paperwork, and meetings, the process works more like a traditional sale. It is completely opposite to the pressure-packed foreclosure proceeding.
For those who don’t know what is a short sale NJ, it is a transaction in which the bank lets a person sell his property for less than owed. The borrower will find an agent and puts the property on the market at a discount.
It Protects Your Credit
From a lender’s point of view, recovering a portion of a mortgage loan is better than absorbing a loss. Therefore, short sale real estate NJ is preferred in place of the foreclosure. It allows the lender and homeowner to end up in a good position.
However, one concern most of the homeowners have is whether the bank will sue for a deficiency judgment. The bank can file a lawsuit against the homeowner in order to recover the difference in the paid amount and the loan amount.
Moreover, a deficiency judgement will also appear on the homeowner’s credit report, which creates a negative impact on your credit score. But, the bank often cut its losses with homeowners who couldn’t pay their mortgage due to some hardships. The reduced amount helps ease the burden on homeowners.
Short Sale Helps Save Money
A foreclosure costs thousands of dollars as average legal costs to a homeowner. Aside from this, additional costs may accumulate throughout the lengthy foreclosure procedure. Further, if the homeowner fails to afford these payments, it may lead to a financial situation, such as bankruptcy.
On the other hand, mortgage lenders don’t always file a deficiency judgement in foreclosure. If both sides agree for a short sale, a new buyer could absorb some of the money the homeowner owes the lender. Thus, a short sale can reduce the amount the bank is looking to recover from the homeowner.
It Benefits Real Estate Investors
There is no certainty in any investment. Thus, the word ‘foolproof’ shouldn’t enter the mind of an investor. However, a savvy investor can do good for himself and help struggling homeowners via short sales.
Buying short sales is beneficial for investors in many ways. Competitive selling prices, easy accessibility to information about the property, and below-market-value buying prices are a few of the advantages.
Moreover, a short sale investor also has an opportunity to work out deals with homeowners, like setting up a plan that helps them build their credit, renting the property back to them, etc.
It Helps The Sellers Avoid Scams
It is disheartening to see a foreclosure on a property. But, remember that dishonest people are waiting to make the matter worse for vulnerable homeowners. You might have heard of the fraudulent deals in which the homeowners end up owing more money.
By opting for the short sale route, the homeowners can keep such scams at bay. As the short sale works like a regular sale, the homeowners get an opportunity to know the professionals they are working with. It helps eliminate the possibility of falling in the trap of scam artists.
It Provides The Homeowners With A Peace Of Mind
Real estate transactions create an ocean of activities between a buyer and a seller, which are stressful. However, these situations don’t compare to the pressure a homeowner faces during foreclosure. Lengthy legal process, credit hit, and the stigma surrounding the foreclosure are devastating.
On the other hand, short sales are risk-free if you work with short sale professionals in NJ. While they can’t eliminate the financial implications, they open the door to solutions that allow the homeowners to avoid the time-consuming legal process.