The Psychology of Facing A Short Sale To Avoid Foreclosure
Many homeowners who have gotten behind on their mortgage move through three possible states of mind as they consider alternative ways to avoid foreclosure on their home. These states of mind are legitimate but all can be dealt with by the homeowner considering a few facts about which route they take foreclosure or short sale.
- State of mind 1 Denial
When a home owner first gets behind on their mortgage payment and as they move forward in time with their mortgage payment being delinquent they can be in denial that anything is wrong and that everything will work out. Homeowners who find themselves in denial typically do not do anything, they just tend to bury their head in the sand hoping for the problem to correct itself or that no one will really notice that they have missed their payment or that anything will happen if they just start paying again next month.
- State of mind 2 Panic
During this state of mind, reality starts to catch up with the homeowner. The mortgage lender has made numerous calls and sent numerous letters and correspondence with the result being that the homeowner now begins to look for ways to save their home. Some solutions sought during this stage are calls to the lender asking for help, loan modification, loan forbearance repayment plans, and short sales, etc.
- State of mind 3 Acceptance or Severance
During this state of mind the homeowner makes a psychological break from the home. This could take the shape of the homeowner just leaving the home and stopping all correspondence with the lender and perhaps even the real estate agent helping them sell the home through a short sale.
It is during these last two stages that most homeowners who face losing their home due to a foreclosure have some tough decisions to make.
One thing to keep in mind about foreclosure and a short sale is that in the short term a foreclosure is easy just mail the lender the keys to the home and move out never looking back. While the short sale is much more difficult in the short term as there is negotiation with the buyer and the lender, lender financial review, a short sale request, time to wait for a lender decision etc.
While the short term is easier for the homeowner who opts for the foreclosure, it should be strongly understood by the homeowner that the long term effects of a foreclosure are much greater than a decision to go through a short sale. This is especially true if you want to become a homeowner in the near future.
As a result of a short sale, a homeowner can consider buying a home after just two years, whereas after a foreclosure the homeowner will have to wait somewhere between 3-5 years to become eligible to buy a home again.
