Most short sales today are because of job loss, loss of income or something that was not related to responsible behavior. Responsible borrowers are finding themselves in need of selling their homes because they can’t keep up with their payments or because they have no more equity left in their homes due to the downturn in the economy.

A short sale can help a seller avoid a painful foreclosure and may even put some money in your pocket. It also helps avoid a substantial ding on your credit report that would have happened if a mortgage ended in foreclosure that could have stayed on a credit report for over 10 years.

Even after everything is done, a foreclosure can come to haunt future homeowners when the time comes to buy a new home. On average it takes anywhere between three to five years before homeowners who go through foreclosure are even allowed to purchase a new home. Most people assume that the lose of money is the worst part of a short sale. In reality a short sale can be a huge boon to the home owner in distress.

The benefits of a short sale isn’t just for the seller. The lender is also highly motivated to cooperate with a short sale. You should remember that banks are not in the business of real estate, they are in the business of lending. Having homes that are not generating mortgage interest is only creating losses for the bank. If a bank decides to go the short sale route, they also avoid a costly foreclosure process.

As the economy fluctuates, the house can lose value even further, creating even more of a loss for the bank. All of this doesn’t include the cost of maintaining a house when the bank owns it. By going the short sale route, the bank can cut short their losses in exchange for foregoing the possibility of getting a much higher value for the home at an auction after foreclosing on it.

Thomas is the content manager for GetMyHomesValue.com, a home valuation company that connects Home Sellers with experts who can help them properly value their home.

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