You've probably heard the term in the news or around the office, but do you know what it is? A short sale is when the lender agrees to accept less than what is owed against the property. Why would they do this? The mortgage company is trying to avoid a foreclosure- which is costly and time-consuming. Usually, the homeowner will need to plea a hardship. Many situations could constitute a hardship, the market area has changed and the house cannot be sold for what it once appraised for, the sellers have lost their jobs and have fallen behind on payments. If the mortgage holder approves the sellers hardship, they may approve a sale that nets them less than the mortgage balance.
The difficult part for the buyer is; The time frame may not be "short" And, each bank has a different process, so its difficult to predict what the process will be. The neighborhood is also effected because these lower prices can lower the value of the neighborhood. The appraisers must use these lower sale prices when they do an appraisal.
On the up side, it keeps houses occupied - good for the neighborhood. Someone's getting a good deal on a great house.
If you have questions whether a short sale is right for you - as a buyer or seller- give us a phone call. We'll direct you to the right resource people if its out of our expertise. If you are a seller in this situation, it's probably better to explore your possabilities sooner rather than later.
Bill Eisenlauer 770-2455 Bob Eisenlauer 979-2883
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1 comment:
Thanks for sharing, It was a great read. I want to read a lot of real estate blogs and I will add you on my list of favorite blogs to read. thanks!
Andy
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