Bank of America has announced it is increasing its incentives to homeowners who opt for short sales, to up to $30,000 in cash to walk away with.
This is a significant boost from the previous cap of $20,000. Wells Fargo borrowers have been able to get similar sums for choosing short sales over letting their homes go to foreclosure and Chase has been giving away as much as $35,000.
Short sales have been selling for an average of $35,000 more than foreclosure properties as well according to RealtyTrac making it far less likely a lender will even ask for a deficiency judgment where they can.
Homeowners who are underwater and need a way out are definitely wise to pursue short sales as an option. It could enable borrowers to purchase another home faster as some of those who have already done short sales are doing now and will certainly look better on paper than a foreclosure or bankruptcy.
The sooner a short sale is completed the faster homeowners can get a fresh start and begin rebuilding. Plus, borrowers need to be aware of the fast pace at which rental rates are rocketing, waiting a couple more months could mean paying hundreds more for the same rental than contracting one now.
However, there are a few caveats for sellers considering short sales. The first of course is that the bank is not your friend. The banks are not happy about the money they have been losing and will take every opportunity to get a dollar back. It’s definitely best to have a pro negotiate on your behalf, especially considering you only have one shot at making a deal.
Bank of America’s cash incentives end this year, as due the tax advantages of doing short sales now, making it essential for homeowners to move quickly. This also means ensuring that you only contract with a buyer who you are 100% certain has the ability to follow through and close. Often this means selling for cash as mortgages are so hard to come by today.
