Don't Screw Up Selling Your Structured Settlement - Stay Clear of These Common, Costly Blunders

By: Kevin Nelson
Submitted: 2007-01-17 16:17:15
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Selling a structured settlement is a major financial decision and as such, shouldn't be taken lightly. Ideally you would want to hold onto your structured settlement and continue receiving payments as-is since that will give you the most money in the long run. Selling all or part of your structured settlement might cost you some of the the earning you would have received down the road, but if you need to raise some fast cash, this can be a viable option.

But before you sell your structured settlement, you should be aware of some of the pitfalls people run into. These are very common mistakes people make when selling a structured settlement but by reading this article and understanding them, you'll be less likely to make the same mistakes.

Mistake #1: Not Knowing Your Financial Needs FIRST

The first mistake most people make is simply not knowing exactly what their financial needs are, why they're selling their structured settlement and how much money they actually need. Often times when we get in a cash crunch it's easy to let emotions and stress run our decisions, but it's extremely important to take inventory of exactly what your financial situation is and why you need to sell your structured settlement.

It may turn out that you can get by just fine by selling only part of the settlement rather than the whole thing. This will not only leave you with a steady stream of income over the life of the settlement (although less than before) but you'll end up with more money, in total, at the end of the term of the settlement.

Too often people simply sell the entire settlement and end up taking a significant loss and possibly having more money than they really needed or can effectively manage. That money might be better used by keeping it inside the structured settlement. So be sure to know exactly what your needs are prior to looking for a structured settlement buyer.

Mistake #2: Choosing The Lender Based On How Much They Offer

Sure, on the surface it makes sense that you would want to go with the lender than offers you the most money. That's obviously the best option in most financial transactions. However, look at the analogy of selling a house. You have multiple buyers all bidding on your place. Some probably seem more qualified than others. But what happens if you accept a bid from a buyer who simply wanted to offer whatever it took to get the property off the market. They may have no idea if they qualify, have no idea how they're going to get the money, and everyone ends up wasting time. Then they might start asking for concessions, lowering their price, asking if you can throw in the furniture or whatever. You end up being stuck with a buyer how just isn't serious and this can be a huge problem if you really need to sell fast.

Well the same applies when selling a structured settlement. You need your money fast! You don't have time to play the run around with a buyer who's just going to get you under contract with the lure of a high bid, only to turn the tables on you once you're stuck working with them. Unfortunately, this happens pretty often since lenders realize you're probably under the gun to get some cash in your pockets quickly. The best thing you can do to avoid this is to get several quotes from multiple lenders before making your final decision. It might take a little more time on the front end, but it will make for a much smoother process once you decide which lender to work with.

Mistake #3: Taking the Lender at Their Word When They Promise a Quick Closing

This is another one of those things that can be easily avoided with proper planning. That way, you're not dependent on a quick closing or enticed by the lenders promises to do so. The fact of the matter is that state law, rather than the lender's prowess, determines how long it will take to close on your transaction. In general, plan on at least a month for your closing to take place. At the extreme end, it can take four months or more, depending on the state in which you and your lender are located.

Article source: Expert Articles