Is a short sale the best option for you? In the current Pierce County real estate market, many home owners find themselves having to make this decision. Perhaps they are getting divorced, have been transferred to another city for work, or simply cannot make their mortgage payments anymore. These local Puyallup and Tacoma home owners are forced to consider selling their home, and yet they have no equity. In fact, they may owe more on the home than what it will sell for in the current Pierce County real estate market.
In a short sale, a home owner has to sell their home for less than what is owed on it. How is this possible?
Mortgage lenders would rather accept less than to have to go through the entire foreclosure process, which can be very expensive for the lender. Lenders are typically not collateral lenders—they do not want the home back.
Although short sales may have the same impact on a borrower’s credit score as a foreclosure, the borrower who does a short sale can typically buy another home within 2 years, as opposed to 5 years if their home goes into foreclosure. Another option: the borrower can choose to transfer the deed in lieu of foreclosure, and the balance is forgiven as in a short sale, but it will be 4 years before the borrower may be eligible to purchase a new home.
The first thing you should do if you find yourself in a situation of not being able to make your mortgage payments, or if you know your payment is adjusting to an amount you cannot afford, is to contact your lender directly and see if the lender has any options for you. Some lenders are willing to work with home owners to come up with a payment plan that will avoid a sale or the foreclosure process.
The next thing to do is contact a Real Estate agent. The sooner you take action the better off you will be. Preferably, find an agent that has worked with short sales or specializes in short sale or foreclosures. It is helpful if the Real Estate agent understands mortgage financing also. If you’d like more information about short sales or what your options are, please contact our team at marzanoteam@kwpuyallup.com or 253-881-4137. We’d be happy to help in any way we can.
