What good, if any, goes to the seller of the property in a SS? To the best of my knowledge it doesn't help their credit in any way? The only thing I see is they might get a few bucks for moving expences and maybe have someone help them find a place to move to. A little help in this matter is appreciated because I don't know how to answer them when they ask me, Why should I SS my house?
The good for the seller, he/she gets out of a mortgage they can no longer support. It does not help their credit directly, but it helps it from getting trashed further by going into forclosure.
I've wondered the same thing. Some just want to see the situation resolved so they don't feel like losers, and they like the idea of working with someone who listens to their woes and can "solve" their problem. Some like--or are even intrigued by--the idea that you're effectively "taking" the big mean bank for a loss by paying less than they owe.
The benefit of the SS for the seller is to avoid foreclosure and mitigate defeciency judgement.
There are also overlooked benefits of doing a shortsale. When you sell your home via shortsale your credit will show late payments on the mortgage BUT will NOT show that the home was foreclosed. As of now current FHA lending guidelines allow home buyers to show a 12 month on time housing history (rental is OK) in order to qualify for a new FHA loan. Which means in some cases the sellers can qualify for a loan again in as little as 12 months. If you do not sell the home then the foreclosure will show on the credit report and it will be a minmum of 3 to 5 years (depending on lender) before you can even be considered for a mortgage again, some even as long as 7 years.
That's good to know. Thank You
To follow-up on a previous comment regarding deficiency judgment mitigation: That's my favorite tack with sellers. Many do not know that, even if the bank takes the house through foreclosure, the bank can come after them for deficiency judgment. This scares the crap out of them. 99% of the time, I won't do a SS unless the bank waives deficiency judgment. Of course, I make sure the seller knows they may get a 1099 for the loss.