The Pros and Cons of a Short Sale: Is it the Right Option for You?

If you are facing financial hardship on your mortgage payments, you are probably considering a short sale. A short sale is when a homeowner sells their property for less than the remaining amount owed on a mortgage. Short sales are often undesirable because they can stay on your credit, and you basically walk away from your home with nothing. Short sales can be a complex and time-consuming process, and homeowners are encouraged to work with experienced professionals, such as real estate agents and attorneys, to navigate the process successfully. Let’s take a look at the ramifications of a short sale and how it can impact your financial future.

How long does a short sale stay on your credit report?

One of the benefits of a short sale is that it is less damaging to your credit than a bankruptcy or a foreclosure. The short sale itself will typically remain on your credit report for seven years from the date of the sale. This can have a negative impact on your credit score, particularly in the first few years after the sale.

However, the impact of the short sale on your credit score will depend on a variety of factors, such as your credit history prior to the short sale, the amount of the mortgage debt forgiven, and how your lender reports the short sale to credit bureaus.

Does a short sale provide some financial relief?

A short sale does provide some financial relief. In some situations, you may be required to make a contribution to the outstanding balance remaining. Once the short sale is complete, you are absolved of financial liability through a process that is known as a “deficiency waiver.”

When you close on a new home, you will likely need a larger security deposit, have a higher interest rate, or in the case of a rental, need a larger security deposit. You will likely have to deal with higher interest rates on other types of debt, like personal loans and credit cards.

Are there alternatives to a short sale?

If you are thinking of going through with a short sale, a fast cash offer may be a viable solution. With a fast cash offer, you might be able to pay off the amount that you owe on the home. You could also potentially avoid drastic impacts on your credit score and be able to find a new home more easily. A fast cash offer can also happen on your terms. If you need to get out of the house fast, Houston Capital Home Buyers can get you a quote in as little as twenty-four hours, and you could have your cash in as little as seven business days.

In today’s market, you might get stuck with the closing fees as the seller. Some buyers are starting to ask for sellers to cover certain types of fees, such as the closing costs. If you sell your home for $200,000, you could also be on the hook for anywhere from $6,000 to $12,000. With a fast cash offer from Houston Capital Home Buyers, you don’t have to absorb any of the costs when you go to sell your home.

Work with Houston Capital Home Buyers to sell your home

Houston Capital Home Buyers will make you a fast cash offer on your home and take care of all the paperwork. You can get a quote on your home in as little as twenty-four hours, or you can make