If you are a homeowner, there has never been
a time quite like today.
Since the beginning of the foreclosure crisis, millions
of homeowners have found themselves pinned in by their
financial circumstances and chained to a mortgage
in which they owe more than their home is worth. In
the past, homeowners enduring these challenges had
very few options, and most of them would either be
forced to sell their home or lose it to foreclosure.
Today, however, there are more options. The government
and the banks have created a multitude of programs
and foreclosure alternatives that can help people
in these circumstances find a dignified solution for
their problems without crippling their financial future.
These options include loan modifications, refinancing,
or short sales.
But what really makes today a unique time for distressed
homeowners is one simple fact:
Banks are now willing to
give you cash to sell the home that you cant
You may be asking yourself: Why would the bank
be willing to pay me money? and How much
money will they pay? Lets take a closer
the bank be willing to pay me money?
This one is really simple. For
the banks, its all about arithmetic. In a foreclosure,
banks take the home from the homeowner and then sell
it at auction. The banks get to keep the money they
make at auction, but they also have to pay money on
upkeep of the vacant property and expenses related
to the sale.
For other options, like a short sale, the bank is
not responsible for selling or maintaining the house
because it is still owned by the original homeowner
and it is the homeowners responsibility to find
a buyer for the home. In almost every case, the final
sale amount in a short sale is greater than the sale
amount at a foreclosure auction.
Because of this simple fact, short sales have become
the preferred foreclosure alternative for the banks.
This is why they are willing to offer the homeowner
cash to short sale their home: even with a cash incentive,
the bank still recovers more money in the long run
and the homeowner is able to walk away from their
financial situation with some cash in their pocket
and the opportunity for a fresh start.