Short sale in real estate apply to both home buyers and sellers. This means getting a nice property for a lower price for potential home buyers. As for home sellers, this means a faster way to sell the property and earn a small amount from it.
But the earnings on the sale won't go straight to the seller's bank accounts. It will be used to pay the mortgage. Short sales are more tricky than they seem.
What is a Short Sale?
A short sale happens when the homeowner no longer has the means to pay off the mortgage of the property. The homeowner will sell the property for less than its price. It will also cost less than the mortgage they owe.
The money they earned from selling the property on a short sale basis will go straight to the lenders. Since the price is less than the homeowner usually owes, the lenders sometimes forgo the balance. But sometimes, the lenders still require the homeowners or borrowers to pay the remaining of what they owe.
A short sale differs from foreclosure. Foreclosure begins when a homeowner or borrower is overdue with their mortgage payments. The lender then seizes the property. Meanwhile, in a short sale, the homeowner decides that they do not have the means to pay off their mortgage. So, instead of losing it, they will just sell the property.
Buying A Short Sale House
The procedure is quite the same as the normal home-buying process. Only this time, you will have the involvement of the lender. The process can be more complicated, too. But here are the steps for homebuyers who want to buy a short sale property:
Financing
The homebuyer must prove to the lender that they have enough money to finish off the property's mortgage.
Get an Agent
Not all properties are up for a short sale. So best to hire a real estate agent who knows the neighborhoods in your city. They should know if a house is up for foreclosure or short sale.
Inspect The Property
Once your agent has a list of short sale homes for you, you must check the properties. Have them inspected. Make sure that you still get a quality home.
Make An Offer and Close
Remember your home budget. Make an offer on the house that you really like and close the deal.
Benefits of A Short Sale
The benefits of buying a property through this program are two-fold. First, homebuyers not only get to live in an amazing house with few repairs. Add that to the fact that it is offered at a discounted price. Second, there is no competition because it's not popular among others who want the same thing!
For home sellers, on the other hand, one of the benefits is that they will be able to prevent experiencing foreclosure. Once you go through this, your credit score will be tainted. It will be harder to borrow money from any mortgage in the future. Another benefit is debt absorption. This means you won't have to pay for your whole debt since the buyers will already take on a percentage of it.
Final Thoughts
If you are looking for a move-in-ready house with few repairs needed or want to live in a fantastic home without having to compete with others, then the short sale program might just be what you're looking for. With high inventory and low demand, it's important not to miss out on this opportunity at your fingertips!
If you want to get more for your property or sell it faster, short sales in real estate might be the way to go. This is a great option when you need to avoid foreclosure and can't afford any other type of loan. Not only will this protect your credit score, but it also helps prevent debt absorption so that you won't have as much money owed after selling off your home.
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