Understanding What is a Short Sale and How Does It Benefit You in Nashville
Are you a homeowner in Nashville, Tennessee, faced with foreclosure or an underwater mortgage and are curious about short sales? In this piece, we’ll thoroughly explain short sales and how they could be beneficial for you.
Key Takeaways
- A short sale is a strategy to avoid foreclosure
- Settles an existing mortgage for less than what is owed
- Helps home owners get out of an upsidedown mortgage
- Has a lesser effect on your credit than a foreclosure
- Usually avoids fees compared to a foreclosure
- Discover TN Home Offers can help you navigate a short sale
Unpacking Short Sales and Their Perks
A short sale is a strategy to avert foreclosure (if you’re unsure about foreclosure, here’s an excellent definition). Although obtaining short sales might be challenging in the current market, they’re often a more straightforward resolution to any remaining debt from a loan.
There was a time, a few years back, when short sales flooded the Nashville market alongside the surge of foreclosures. However, as the number of foreclosures has dwindled and home values have started to bounce back, lenders have become somewhat reluctant to propose short sales, even though they’re still fairly common.
It can be tough to know what you options are in Nashville when you are faced with the prospects of a foreclosure. We, Discover TN Home Offers are here to help.
Let’s examine the reasons why a short sale could be an advantageous choice for your Nashville home.
Here are a few reasons you may want to consider short sale on your Nashville home
Dodging Foreclosure and its Damaging Aftermath
A prime advantage of a short sale is it helps you dodge a foreclosure. Your mortgage lender settles for less than the mortgage’s outstanding amount, freeing you from an unaffordable debt. This is by far the best benefit of short sales.
A foreclosure could lead to several financial complications, including difficulty in securing a new home loan due to a foreclosure’s 7-year stint on your credit record.
It can even impede your ability to rent as it damages your credit score and you may need to disclose the foreclosure on rental applications.
Protecting Your Credit
Foreclosure can have severe implications for your credit, making it challenging to obtain regular bank loans for things like a car or a house.
If you’re in a job that involves handling money, you might face termination if your employer takes your credit status seriously (though most don’t, it has occurred).
By relieving you from the remaining debt on the mortgage, a short sale allows both the bank and you, the seller, to move on. A short sale inflicts less damage on your credit score, helping you recuperate in the long run. It merely shows as a pre-foreclosure status on your credit report, causing a minimal dip in your credit rating compared to a foreclosure.
Purchasing a New Home
A foreclosure might prohibit you from securing a new mortgage for up to 7 years.
In contrast, a short sale provides more leeway, allowing new home applications just 2 years post-filing, depending on the bank. It might also make mortgage lenders more inclined to approve your loan than if you had a full foreclosure. However, the lender’s stance can vary.
If you’re having trouble getting approver for a mortgage a year or two after a short sale, don’t hesitate to explore other banks.
No Fees Usually
A notable benefit of short sales is they typically involve no bank fees. Banks simply wish to clear the loan from their books. If your house is “underwater” (worth less than the mortgage), they might opt for a short sale rather than an expensive foreclosure.
With a foreclosure, your lender may add extra fees that exacerbate the situation.
While some real estate consultants might charge a fee to facilitate the foreclosure with your bank, check before employing a real estate agent or firm.
Our company, Discover TN Home Offers, can guide you on how to increase your chances of bank approval for a short sale with your Nashville home. Connect with us at 615-492-4511 or email us through our contact page.
Applying for a Short Sale – The Required Proof
To get a short sale, you need to provide evidence of being incapable of meeting your mortgage payments. This can be challenging, so a local real estate attorney with relevant experience can be invaluable.
If you’re uncertain about who to contact or whether a short sale is a viable option, reach out to us. We offer free consultations to discuss your circumstances and provide options. We can sometimes do the work for you, or even purchase your house to help you escape that mortgage.
We buy houses in Nashville, working with homeowners like you who are struggling to sell your home the traditional way or prefer not to list with an agent. Unlike most of the cash buyers, we are also licensed real estate agents. Banks can get picky about what they will accept as an offer for the short sale, and a cash buyer like Discover TN Home Offers can help instill confidence in the bank that the transaction will go through. However, depending on your circumstances, the bank may want to get a higher offer amount and that offer may need to come on the open market.
If listing with an agent when processing your short sale is the best for you, we can help you with that and ensure a successful transaction.
Get in touch with us anytime to discuss your situation. We would love to help! We know that having to start the short sale process can be tough and very emotional. However, there is no reason to be ashamed. Life happens and short sales and foreclosures allow people to get back on their feet and move on with a fresh start.
If you want to see what we can offer on your house… click the link below and fill out the form on the next page. We’ll make a no-obligation cash offer to you within 24 hours. At least that way you know whether that is an option for you or not.