Whether you’re a buyer or a borrower/seller, a short sale, and foreclosure each present different advantages and difficulties.
What Is A Foreclosure In Macon, Georgia?
In simple terms… “A foreclosed home is one in which the owner is unable to make his mortgage loan payments and the bank repossessed the home” (source). If you stop making your house payments… your lender has the right to foreclose on your property so they can attempt to recoup their money that was lent to you.
When a borrower fails to make mortgage payments, a home is usually foreclosed on. The lending institution takes ownership and possession of the property, evicting the borrower. Subsequently, these properties are either sold at auction or through more traditional means involving real estate agents. Foreclosure can negatively impact a borrower’s credit rating, making it challenging to secure a mortgage for several years.
Depending on the state that you live in… a foreclosure can work in different ways. Check out the foreclosure process information over here at the HUD Government website.
What Is A Short Sale?
In a short sale, the home is still owned by the borrower.
The definition of a short sale is… “A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens’ full amounts and where the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt” (source: Wikipedia)
In specific scenarios, a short sale functions as an arrangement between borrowers and lenders. In a short sale, the property is sold for less than the outstanding balance of the mortgage. The responsibility of the borrower for the remaining unpaid balance, referred to as the deficiency, may differ.
Completing this process often requires a significant amount of time since multiple lending institutions may hold the mortgage. It is essential for all involved parties with a stake in the property to consent to the sale terms. If any of the lenders do not agree, a potential deal may not proceed as planned.
Short Sale vs Foreclosure – Your Options
While both options can have consequences, a short sale typically has a milder effect on the borrower’s credit score. In the case of a foreclosure, a borrower’s credit score could decrease by 300 points or more, whereas a short sale might result in only a 100-point drop in the credit score.
Individuals who have gone through foreclosure may find it challenging to qualify for a traditional mortgage to buy a new home within 5-7 years. However, in some cases, those who have completed a short sale may be able to purchase a new property right away.
As many Americans struggle with an economy that has yet to completely recover from the 2008 crash, folks are having a hard time making monthly mortgage payments. Choosing between being foreclosed and initiating a short sale (or a 3rd option… selling your Macon house fast )is an easy choice for a borrower having troubles paying their mortgage on time.
At times, lenders may collaborate with borrowers to facilitate a short sale, aiming to circumvent the expenses and lengthy procedures associated with foreclosures.
Our suggestion is always this.
- Talk with your lender and discuss ways that they can work with you on your loan. We offer this service where we can help guide you in the right direction if you run into issues with your lender… just reach out to us on our Contact page and we’ll discuss your situation.
- Attempt a short sale or other programs your lender may have that forgives part of your loan, creates a new / more affordable monthly payment so you can get back on your feet, etc.
- If the bank isn’t willing to work with you very much… your best option may be to sell your house. Work with a local real estate house buyer service like Georgia House Buyers LLC to sell your house fast for an all-cash offer. If you’re interested we can look at your situation and make you a fair offer on your house within 24 hours. Just fill out the form on our website over here >>
- Foreclosure. Last resort is to let the house fall into foreclosure. This is the worst possible scenario. It’ll harm your credit and you could still be left with money owed to the bank even after the foreclosure is finished.
Understanding your options when facing financial hardship can make a significant difference in protecting your future homeownership opportunities. By carefully evaluating alternatives, you may be able to avoid severe damage to your credit score, keeping the door open for purchasing a new home once your financial situation improves. A foreclosure can have long-lasting consequences, remaining on your credit report for up to seven years and making it extremely difficult to qualify for a new mortgage during that time. It can also lead to a dramatic drop in your credit score, affecting your ability to secure loans, credit cards, and even rental housing. Taking proactive steps to explore other solutions can help minimize these financial setbacks and put you in a stronger position for recovery.
One alternative to foreclosure that may be a better option is a short sale, which occurs when a lender allows a homeowner to sell their property for less than the amount owed on the mortgage. While a short sale will still impact your credit score, it is generally less damaging than a foreclosure and may allow you to qualify for a new home loan much sooner—sometimes in as little as two to four years, depending on the lender and your financial recovery. Additionally, a short sale demonstrates to future lenders that you took responsible action to resolve your financial difficulties rather than simply walking away from your obligations. If you are struggling to keep up with your mortgage payments, understanding and pursuing the best possible option for your situation can help you regain financial stability and work toward homeownership again in the future.
Have a pending foreclosure? We’d like to make you a fair all-cash offer on your house.
Give us a call anytime at (478) 739-3968 or
fill out the form on this website today! >>
We are proud to offer our home-buying services in a wide range of cities, helping homeowners sell their properties quickly and hassle-free. If you need to sell your house fast, we are ready to assist you in the following areas: Macon, Lizella, Warner Robins, Bonaire, Jeffersonville, Kathleen, Centerville, Byron, Fort Valley, Gray, Milledgeville, Forsyth, Juliette, Bolingbroke, Roberta, and Dry Branch. Whether you’re facing foreclosure, going through a divorce, dealing with an inherited property, or simply looking to move on from your current home, we provide a straightforward and efficient selling process with no hidden fees, commissions, or unnecessary delays.
