Ever heard of a short sale mobile home? And no, we’re not talking about the mobile home’s physical size. Well, today we’re going to explain what a short sale mobile home means and how it could be a good or bad idea.
Like with all other housing scenarios, a short sale mobile home comes with its own pros and cons. But what are they? Read on and we’ll give you the full scoop on this situation.
What is a short sale mobile home?
So let’s start with definitions – that way we’re all on the same page. To be clear, a short sale is when a mobile home is sold for less money than what is owed on the mortgage. Rather than go for foreclosure if the owner can’t afford to pay for their mortgage, the lender works out a short sale with the homeowner. If a short sale is agreed upon, the lender accepts less than what is owed on the mortgage instead of going for a foreclosure.
The lender usually sees a perk in going for a short sale — they save money on what they might have spent on foreclosure costs. A foreclosure can be pretty spendy, making a short sale appealing to both lender and the mobile home owner.
You’ll want an experienced real estate broker to help you take on the task of working out a short sale deal between you and your lender.
The advantages of a short sale mobile home
Now that we’ve defined a short sale mobile home, let’s talk about the advantages and disadvantages in greater detail. But first, let’s talk advantages.
A short sale will give you more opportunities in the future
Here’s the thing about a short sale — in the future, banks will take you seriously. Rather than allow the home to go into foreclosure, you cared enough to evade that by going for a short sale. They’ll see that in your records and take note.
Evade the negative credit impact of a foreclosure
By going through the foreclosure progress, you’ll inflict an unappealing aroma onto your credit history. The short sale route could be a less painful avenue for your future, so keep that in mind.
If you’re a buyer, you can get a good deal
Now here’s a winning thought: if you’re on the buying end of a short sale mobile home, you could snag yourself a great deal. In these situations, homes are priced to sell. People are in a hurry to get them off the market and get their money.
The disadvantages of a short sale mobile home
And what about the disadvantages of a short sale mobile home? Like with anything else, the disadvantages are there.
Will negatively affect your credit
Yes, there will be a negative impact on your credit.
But if your other option is a foreclosure, you better believe that a foreclosure is worse than going for a short sale.
You need to sell your home
It’s up to you to ensure that the home gets sold. So you better have a great real estate agent on board who’s active when it comes to finding a buyer. Time is of the essence in this situation.
You don’t make anything on the sale of the home
In a short sale, you normatively take a loss on the sale of your mobile home. Why? Because of the simple fact that your lender agreed to lose money so a short sale could take place. While it’s less than what they would have lost in a foreclosure, it is still a loss.
It’s a long process
The short sale process could span weeks or months. There’s a bit of negotiating and paperwork to deal with as the short sale process goes along. If there’s more than one lender involved, it gets even hairier.
Forgiven debt might be taxable
Some states may consider a forgiven debt to be taxable income. This varies from location to location. Speak with a real estate attorney for tax and law information as it pertains to short sales in your state.
Should you embrace a short sale mobile home?
So should you go for a short sale mobile home? If you’re a buyer, you could get yourself an amazing deal as the value of the house drops 20% or more in a short sale situation.
But if you’re on the seller end of a short sale mobile home, we’d encourage you to consider it and speak to professionals in this field. Whatever you choose to do, we wish you the best!