It may seem odd that a lender would agree to a short sale, but there are actually several benefits that make the process more appealing than alternatives.
- On average, short sales typically take around six months. This is much quicker than pursuing foreclosure, which can take about one year to complete.
- The sooner the bank gets the money from the short sale, the sooner they can invest those funds in something else, and realize the time value of money that we get from interest.
- Conducting a foreclosure is an expensive process, which includes a number of administrative costs and attorneys' fees. By doing a short sale, the lender is actually avoiding incurring any of those additional costs.
- Following a short sale, the lender will forgive a portion of the debt, which they can write off. This means they can actually realize a tax benefit from accepting a short sale.
- Considering potential foreclosure costs, and the possibility of marketing costs to sell the home, it’s unlikely the lender would be able to find a buyer willing to pay a higher price for the home than could be found with a short sale.