In Real Estate, What is a Short Sale?
A short sale is one of the most popular words within the real estate industry today. A short sale is generally the process that homeowners consider before a foreclosure occurs. In a short sale, the homeowner contacts the lender to see if the lender would allow them to sell the property for less than the remaining balance. Now, a short sale is not a quick process so if you are looking to sell your home in a hurry, and are not facing immediate or upcoming foreclosure, you may want to consider selling your home the traditional way. Sometimes selling properties the traditional way, especially in today’s market, seems virtually impossible, due to homeowners being upside down in their mortgages (owning more than their property is worth). If your lender agrees or even considers the possibility of allowing you to short sale your property, be prepared to submit lots of paperwork. They will want financial statements, a list of your current bills and payment amounts, all avenues of income, income tax documents, and they will want you to list the property for sale with a licensed real estate broker/agent. Short sale approvals are taking anywhere from 60-90+ days so again, if time is of the essence, you may want to consider other avenues. If you are person looking to purchase short sale property, know that your expected wait time, once you submit an offer to purchase, is about 60+ days. The banks are inundated with short sales offers, on top of foreclosure properties so the wait time is sometimes unbearable. Some people, who initially submit offers for short sale properties rescind their offers in the interim because the wait time has exceeded their patience. Short sales can be beneficial in some ways but not so in others. If you are unsure as to the process and feel uncomfortable with just dealing with an agent, seek legal counsel before commencing a short sale.
There are few options available to homeowners when they are facing foreclosure. Since foreclosure inevitably scars a homeowner’s credit for many years, anyone searching for ways to prevent foreclosure should investigate the option of a real estate short sale. Basically, a short sale involves a lender who agrees to take less than what is owed on a mortgage. Although it involves a certain amount of extra work, it can be a winning situation for both homeowner, lender and ultimately a buyer. When a lender is faced with a large amount of foreclosures, their financial health begins to deteriorate. They are in business to make money closing loans and servicing them. Owning too much real estate stops a lender’s flow of money, in addition to costing a lender additional legal fees. While all lenders won’t be willing to engage in a short sale, it’s worth a try for homeowners facing foreclosure. In order to be considered for a short sell, homeowners must meet certain qualifications. Mortgage payme
A short sale – The homeowner gets permission from the bank to sell the house for less than what he still owes on it. This can get complicated… stay away from it. REO – Real Estate Owned (Bank Owned) The house already went thru foreclosure but nobody bought it at the foreclosure sale and now the house belongs to the bank. This is the best deal for you. There are no hidden liens or mortgages on the house and the bank usually sells it for a bargain. Banks are not in the Real Estate business and do not want the added expense of keeping the house in shape. Make sure that you have the house inspected, etc. before you decide to buy an REO. Good Luck.
