Traditionally, selling your home is an exciting chapter for many as it signifies a fresh start. However, when you’re struggling to make mortgage payments on this asset, it can lead to foreclosure. You’ll want to avoid this possibility, so you must explore alternative options. One choice you want to consider is a short sale. Keep reading to learn more about this process and discover how a Montgomery County, PA residential real estate attorney can help you through this transaction.
How does a short sale differ from the traditional home-selling process?
A short sale is a process in which the homeowner will list the home for less than the current amount on the mortgage. This is generally only done in cases where the homeowner is financially stressed and is trying to prevent foreclosure on their property. However, in periods when the real estate market is not doing well, homeowners may rely on a short sale.
This differs from the traditional home-selling process in that most people sell their homes for profit, even if they have a mortgage. Generally, homeowners will sell and use the money they receive to pay off the mortgage while still retaining profit from the sale.
What are the benefits of this process?
One of the primary benefits of opting for a short sale is that you can avoid foreclosure. When your home is foreclosed, it can cause severe damage to your credit score. While a short sale may lower your credit score, it will not do as much damage as a foreclosure.
Similarly, you may be able to have the rest of the debt associated with this asset dismissed. When you sell on a short sale, all the funds from the sale will pay off a portion mortgage. In some states, the lender is required to forgive the remaining debt. The lender may file a lawsuit to receive a deficiency judgment, which ensures the borrower is still responsible for the remainder of the debt. However, you may be able to ask the lender to use language in the agreement that dismisses your responsibility to pay the remaining debt in the event of a short sale.
Should I enlist the help of an attorney?
If you are considering a short sale, it’s essential to enlist the help of an experienced real estate attorney to help guide you through the process. Not only can they provide guidance, but they may be able to help you negotiate with the lenders to reduce the amount you owe after a short sale.
Similarly, a short sale can be complex to navigate. Like any transaction, there are risks involved, but having an experienced real estate attorney on your side can help you reduce the associated risks.
At Friedman Schuman, our dedicated legal team understands the complexities associated with selling a home, especially when it’s a non-traditional sale. Contact us today to learn how we can help you. You’ll connect with an experienced attorney to discuss the details of your circumstances.
