Austin Texas – If you are still trying to convince yourself to try a Bank Short Sale versus letting your home go to Foreclosure, you might find the following useful.

Click here to discover how other sellers successfully did a short sale and avoided foreclosure.

Example 1: Short Sale

Mr. Jones owns a home in which he has a mortgage balance of $200,000 and a current market value of $150,000. Mr. Jones has elected to short sell his property. His agent successfully obtains a buyer who puts forth an offer price of $135,000 (90% of the current market value). After reviewing the buyers offer and the financial hardship information from Mr. Jones, his bank agrees to accept the short payoff of $135,000 which would leave a deficiency balance of $65,000 plus closing costs (his bank pays all the closing costs, including agent commissions and taxes for him in a short sale). The transaction closes and is final. Mr. Jones then pulls his credit report 60 days after the transaction takes place. On the credit report he sees that the mortgage trade line states “Mortgage debt was settled for less than full” and the balance on the mortgage is $0. Mr. Jones is now on the road to financial recovery.

Example 2: Foreclosure

For the ease of illustration we will use the same value and mortgage debt amounts as in Example A. However, Mr. Jones has elected to forgo the short sale process and let the bank foreclose on his property. The bank holding his mortgage facilitates the proper legal procedures to foreclose on the property, all of which are costly. Mr. Jones is notified and his property foreclosed on and taken back by the bank to sell as an REO. Six months later, the bank finally sells Mr. Jones home only they sell it for $120,000 (80% of current market value). Remember, as a short sale, the home would have sold for $135,000 keeping the deficiency to $65,000. In addition to the deficiency now being $80,000, the bank has elected to add on legal costs of $15,000, closing costs of $10,000, and asset preservation costs of another $5,000 for a total deficiency liability of $110,000. Mr. Jones pulls his credit report 60 days after being notified that the bank has sold his property and of his liability. On the report he sees that the mortgage trade line states “Foreclosure” and the balance is $110,000. Because of Mr Jones choice to choose Foreclosure vs. Short Sale, his road to financial recovery has taken a major detour. He not only has a foreclosure on his credit report now, he also has a $110,000 deficiency balance on his credit report now too, and his bank will also likely seek a deficiency judgement against him within 2 years of the foreclosure for this $110,000 deficiency. This deficiency judgement may renewed every 2 years by the bank for a total of 5 times in Texas (so this is now a 10+ year problem for Mr Jones). This $110,000 deficiency judgement will follow and haunt Mr. Jones wherever he goes now (for about 10+ years). Mr. Jones will also likely have to retain an expensive attorney at some point to help defend himself against this $110,000 deficiency judgement.

The Best Option is Clear

While the financial, legal, and credit advantages are clear when choosing a Short Sale over a Foreclosure, other advantages are sometimes overlooked. The most important of all of them is maintaining the seller’s dignity and peace of mind. We have heard too many stories of families having to leave their homes because of a Sheriff’s or Constable’s orders or some other type of legal action the bank has taken. The short sale process alleviates this negative social impact. The process puts the control back in the seller’s hands so that they can get back on the road to financial recovery. In the battle of the two evils, the Short Sale is always the winner.

Thinking about a short sale?

I can help you short sale your property and get back on your feet. Send me an e-mail at GeorgeKiefer@gmail.com. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (512) 970-0709
Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our Austin loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy.

Thanks for reading this, George Kiefer, GRI, CDPE

George is a Real Estate Agent and Broker Assiciate at Keller Williams Realty. Austin Short Sales Realtor:
Phone: (512) 970-0709. GeorgeKiefer@gmail.com.
Assisting Homeowners in Distress
View My homes for sale at www.GeorgeKieferAustin.com.
George Kiefer specializes in loan modification assistance and short sales in Austin Texas. Austin Loan Modification Help, Austin Short Sales. Austin Short Sale Realtor Austin Texas Short Sales. Austin Realtor.

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Important Notice
George Kiefer, Keller Williams Realty, and the Stop Foreclosure Institute are not affiliated in any way, shape, or form with the government. Our services have not been reviewed or endorse by the government or your lender. Most lenders willingly work with agents on short sales. Why?
Because most short sales are beneficial to a lender. If you accept our offer to help you on a short sale, your lender may not agree to a short sale or to modify your loan. We do offer a loan modification kit.
However, the likelihood of negotiating a modification is like everything else in life. It takes work and persistence to convince your lender to modify your loan. No matter what you or we do, your lender may not approve a loan modification.
We do not recommend that you stop paying your mortgage, because this will cause damage to your credit and could cause you to lose your home. Because we know avoiding foreclosure is so important to any homeowner, we recommend that you speak with the appropriate legal or tax advisor before making any decision.
This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.
You have the option to reject a short sale or loan modification from your lender if it does not meet your approval. If you decide not to go thru with the short sale, then you do not have to pay us our fee. We normally make a real estate sales commission for helping you on a short sale.
The views expressed here are George’s personal views and do not reflect the views of Keller Williams Realty.
This information on Austin Short Sales: is provided as a courtesy to our viewers to help them make informed decisions.