Everyone learned a lot from the events in the real estate industry ten years ago. The word short sale became a ubiquitous term, practically everybody knew what it meant and hoped that it didn't apply to them. People also became very familiar with the term bankruptcy as it was another alternative during this mass crisis. Since that time, we've been able to get a clear understanding of each of these solutions when you're upside down with your home. Each option has their pros and cons depending on your circumstances. However, one can really outshine the other despite what many people think. Let's take a look at why it's better to have a short sale Instead of declaring bankruptcy.
Its True Short Sales Can Be A Long, Difficult Process.
There's no denying the fact that there are challenges with trying to apply for a short sale. Short sales can be very complicated and time-consuming requiring a lot of attention to detail. Not to mention, the amount of work involved to prepare your package for the bank can be arduous. Trying to assemble detailed information while being in the state of emotional distress, isn't easy. The significant advantage of a short sale is that your working with the bank instead of against them. If done correctly, this can work out to your advantage, and you'll see why in a minute.
Be Sure To Explore Both Types Of Bankruptcy.
While there may be some advantages to filing bankruptcy, there's also a lot of negatives that can go along with it. Filing for bankruptcy does involve a lot of red tape. It can also negatively influence your credit score for many years. There are different types of bankruptcy, the first one is chapter 13 and the second one is chapter 7. Taking some time to explore both of these events is essential.
Short Sales Can Have A Better Long-Term Outcome.
If you're dealing with the situation where are you have more debt involving cars, Medical bills, Credit Cards and other types of debt bankruptcy might be the option. But if you're selling a house and the major problem is you cannot get the money to pay what is owed then the short sale is the way to go.
Comparing Apples To Apples Short Sales Provide A Clear Way Out.
When comparing Apples to Apples, meaning dealing with a home that is upside down and you're looking to resolve the situation without significant consequence to your credit rating, then a short sale is favorable. Working with your bank through a short sale is a big advantage because the bank is more likely to work with you. They're not in the industry of home ownership. They don't want to be the trustee. In fact, they don't want to even deal with the sale if they don't have to. They're much happier having someone else do the work for them with a predictable outcome instead of the uncertainty.
In closing, be sure present everything to the bank in an organized manner and make it as easy as possible for the bank. The bank is willing to work with all parties including the buyer to resolve the situation and ultimately close the deal. In return for all this, the bank is prepared to issue debt relief.