The short sale of a home, which means that the homeowner is selling the property for less than they owe the lender after the homeowner receives a Chapter 7 discharge has its advantages and disadvantages. However, when thinking about and planning for the future, a short sale may offer the homeowner several benefits over allowing the lender to foreclose on the home.
A Short Sale Can Be Complicated
A short sale can be complicated due to the fact that someone must negotiate with the lender to approve the transaction. A short sale becomes even more complicated if there are junior lienholders, such as a second mortgage. Other issues arise such as how to choose a listing price and how to deal with issues such as problems connected to maintenance (especially if the property has been unattended to and is in disrepair), and any unpaid utilities and such. Negotiating with the lender can be time consuming due to the sheer volume of short sale offers lenders are reviewing at any given time
There is a lot to deal with when a homeowner is attempting to quickly sell a home right after being granted a bankruptcy and before the lender forecloses upon it. Still, despite the desperate and pressure filled situation in which you find yourself, there are some very good reasons to seriously consider the short sale.
Does the Homeowner Want to Buy Another Home?
There is one major advantage to the short sale – and that has to do with looking towards the debtor’s future. If the debtor wants to purchase another home, a short sale may allow the debtor to do so a lot faster than a foreclosure would. When calculating time frames for obtaining a new mortgage, the lender looks to when the transfer of title occurred of the prior home. A short sale allows the homeowner control over when title is transferred whereas if the homeowner sits back and waits for the mortgage lender to foreclose, the homeowner has no control over how long the foreclosure, and then transfer of title, occurs.
In addition, with a foreclosure, the Final Judgment of Foreclosure is recorded in the official records of the county where the property is located, which means there will be a Final Judgment reported on the homeowner’s credit report. A short sale is not reported on a credit report.
Consult a Knowledgeable Bankruptcy Lawyer
The primary action that anyone should take before short selling his/her home after Chapter 7 bankruptcy is to consult a bankruptcy lawyer. A knowledgeable bankruptcy lawyer will be able to assess the situation and help them decide what the best option will be for then.
The attorneys at The Law Office of Kelley & Fulton are experienced and knowledgeable about this area of the law and can assist homeowners with obtaining a fresh start. Call bankruptcy attorneys in South Florida at 561-491-1200.