When the realization comes that you can no longer afford to make your mortgage payments, it is a terrifying moment. You may not want to face it, but taking action to stop foreclosures with short sales is in your best interest. It may not be what you want, but it is much better to arrange a short sale than to let the lender foreclose. You may feel that holding on for as long as possible is the way to go, but when you do that, you are only hurting yourself in the long run. You must take a long hard look at your situation and if you cannot realistically catch up on your payments and continue to make them, a short sale may be your best option.
The first thing you should do when you see you are falling behind is to communicate with your lender and discuss your options. Once you get to the point where you have limited options and are in fact facing foreclosure, discuss a short sale with your lender. In a short sale situation, the lender agrees to allow you to sell the house for less than what is owed on the property, they agree to accept this amount and forgive the rest. This way after the sale, you walk away owing nothing more.
A short sale is not only better for you, but for your lender too, they get to avoid the lengthy and expensive foreclosure process. This is the reason why they are likely to work with you as long as you start the process as soon as possible, if you wait too long, the lender may not be as willing to work with you.
If you do not work it out with your lender to do a short sale and they do foreclose, they may still come after you for what is left on the loan after they auction off your home. While a short sale and foreclosure will both have a big impact on your credit score, a foreclosure is worse. The foreclosure will stay on your credit report for at least ten years.
Once you decide that you are going to do a short sale, you should search for a real estate agent that has experience in these sales. This is very important. You want to get your house sold as quickly as possible and you need a real estate agent that not only knows what they are doing, but is willing to work hard for you.
With more and more homeowners facing the fact that they can no longer afford their homes, the decision to stop foreclosures with short sales is one that is being made in many homes. While losing a home is extremely difficult, knowing that you have the option of a short sale is a bit of good news in this devastating process. It will minimize your financial obligations to your lender and let you move on and work on getting your life in order faster.