How To Avoid Foreclosure: Top 3 Benefits of Short Sales

Your home facing foreclosure can be a distressing experience, threatening your financial stability and credit leaving you unsure of what steps to take next. However, there’s a strategic option available that not only helps avoid foreclosure but also offers other significant financial benefits: the short sale. As Chicago short sale experts, Pearson Realty Group & PRG Management’s veteran REO team are here to guide you through the short sale process, illustrating how it can be a preferable alternative to foreclosure.

Short Sale Benefit #1: Financial Relief

A short sale occurs when your home is sold for less than the amount owed on the mortgage (with the lender’s approval). This method provides immediate financial relief as it prevents the lender from pursuing the full amount owed post-sale, unlike in a foreclosure. This process can free you from an unmanageable mortgage, allowing you to start fresh without the looming burden of your previous debts.

Short Sale Benefit #2: Avoid Deficiency Judgments

One of the most significant advantages of choosing a short sale over a foreclosure is the possibility of negotiating the waiver of a deficiency judgment. Waiving this judgment means that the lender forgives any remaining debt on your home loan after the short sale. Without this particular judgment, homeowners could still owe an unsecured balance after the property is sold at a bank auction, which does not happen in a short sale with the right negotiators (like Pearson Realty Group).

Short Sale Benefit #3: Protect Your Credit

While both short sales and foreclosures impact your credit score, a short sale may have a less detrimental effect and provide longer-term financial security. Foreclosure can lower your credit score by 200 to 400 points and affect your ability to borrow for many years to come. On the other hand, a short sale is less damaging to your credit score and could allow you to be eligible for another mortgage sooner than if you let the property go into foreclosure.

Pearson Realty Group: Chicago’s Short Sale Experts

At Pearson Realty Group, we specialize in navigating the complexities of the short sale process. Our seasoned REO team is committed to advocating with lenders and vendors on your behalf to ensure the best possible outcome for your home. We offer private financial consultations to explore your options and determine if a short sale is right for you. Contact us today to learn more about the short sale process, and how to avoid foreclosure and start down the path to financial recovery.

Video Transcription: “Hi, I’m Kirby Pearson. Today we’re talking about the top three reasons why you should consider doing a short sale. Number one is for financial relief. You want to avoid a foreclosure on your record. A foreclosure can be devastating to your credit. The second reason is to avoid a deficiency judgment in your name. Let’s say you owe $500,000 on your mortgage. Let’s say you owe $500,000 on your mortgage for 300,000, you’ll still owe the bank 200,000. That’s even actually worse than having a foreclosure in your name. The third reason is to protect your credit. While a short sale will affect your credit, it won’t affect it as much as it foreclosure. And after the short sale is complete and the bank removes the mortgage from your name for less than you owe, you can begin to work on than you owe, you can begin to work on If you like a free private consultation about your financial situation, please contact me below.”