Bank vs Homeowner – When Does A Short Sale Benefit Both

Myrtle Beach Short Sale DecisionIn our current economy a question that is being asked frequently is the housing market is, “What is a short sale?” More and more Myrtle Beach homeowners are opting to use this type of home sale. Simply put, a short sale is when a Myrtle Beach homeowner elects to sell their home for less than what is owed to their lending institution. There are advantages and disadvantages for both the bank and the Myrtle Beach homeowner.

Banks and Short Sale

There are multiple reasons why a bank or mortgage lender would agree to selling a Myrtle Beach home for less than what the homeowner owes. The benefits to the bank from a short sale are:

  • In most instances a short sale will cost the bank less than the foreclosure process
  • Owning property is not in the banks best interest
  • Lenders are in the business of making money

With a short sale, the bank has the option of approving any offer received by the Myrtle Beach homeowner. In some instances there will be more than one lending institution involved and the bank with the first mortgage will make the determination on whether there is enough money in the offer to make it worth proceeding with the short sale or moving forward with a Myrtle Beach foreclosure. This process will take time since most mortgage holders need to go through a lot of “red tape” before a final decision is made.

Myrtle Beach Homeowner and Short Sale

Why would a homeowner elect to list their home in a short sale? Here are some benefits to the Myrtle Beach homeowner:

  • Your credit score will take less of a hit with a short sale vs a foreclosure
  • You can remain in your Myrtle Beach home until you have an offer that the bank will accept
  • Your payments will be suspended (this is dependent on bank policy)

Prior to starting the short sale process, the Myrtle Beach homeowner will first need to contact the bank and discuss all of your options. You will want to fully understand the bank processes for short sales. You will want to provide a hardship letter which outlines why you cannot make your monthly mortgage payments. You will also want to provide documentation on your current earnings status. This must be done prior to the bank starting the foreclosure process. You will want to read our article on communicating with the bank and the late payment process. The bank will then inform you as to whether they “accept” your offer of a short sale.

Downside of a Short Sale

For the lending institution, the downside to a short sale is they will need to forgive a portion of the amount owned on the Myrtle Beach property. For the Myrtle Beach homeowner, you will take a hit on your credit score and this can be a very long and stressful process.

In many instances, a short sale can benefit both the distressed Myrtle Beach homeowner and the lender. A short sale provides the homeowner with a way out of an unexpected change in their financial status and get out from under a mortgage they can no longer afford and the bank wins by receiving the majority of what is owed on the Myrtle Beach property and they avoid foreclosure.

Before making any decisions, a Myrtle Beach homeowner should consult with a real estate professional who is well versed in both short sales and foreclosures. You will also want to check with your accountant or tax specialists to determine the tax consequences from a short sale.

Call us today to run a market analysis on your home and help you determine if a short sale is your best solution.

JP Short Sales Team
854 Jason Blvd, Myrtle Beach, SC 29577
(843) 222-1926
‎myrtlebeachshortsaleteam.com

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>