Anyone in the real estate market, whether selling or purchasing new real estate, likely knows what the term ‘short sale’ refers to. A short sale allows you to find home’s that are offered at a great price and also allows you to take advantage of mortgage rates when they are low.
However, do you really know what the short sale process is? If not, learn more here.
Understanding the Short Sale
In the real estate industry, a short sale is when the sales proceeds earned from a property are not enough to cover the mortgage loan. This means the seller of the property will owe more than they are able to actually sell it for.
The bank, or mortgage lender, has also agreed to discount the balance of the loan or agreed to take less than what is actually owed. In most cases, the owner of the home will have to prove a financial hardship before the lender will be willing to accept the short sale terms.
While this may not be the ideal situation for the homeowner, it is a much better option than facing foreclosure, since the short sale will usually not impact the credit score of the homeowner as much as a foreclosure would.
Why Lenders Agree to Short Sales?
One of the main questions asked regarding short sales is why a lender would agree to this. After all, this is essentially going to leave them at a loss for the mortgage they originally provided.
If the homeowner simply stops making any payments toward their mortgage and the property enters into foreclosure, it may take a number of months for the lender or bank to regain control of the property. After control is acquired, they will still have to put the home on the market and it may take another several months to have the house sold. Foreclosure is quite expensive for banks and the main reason they are willing to offer the owners a short sale.
Benefits of a Short Sale Purchase
There are a number of advantages offered by purchasing a home offered in a short sale:
- You receive a great deal
- You receive a great mortgage rate
- You will be able to get through the process fairly easily
Ready to Find a Short Sale Property?
It a short sale purchase sounds appealing to you, then there are a few steps to follow to find the right house. These steps include:
- Identify the possible short sale
- Have the property inspected
- Research the values of other homes in the area
- Find if any mortgages and liens are present
- Acquire the necessary financing
- Use a real estate agent to contact the lender
- Complete the short sale application
- Negotiate and close the deal
With the help of an experienced real estate agent, purchasing a home from a short sale offers a number of benefits for buyers. It is also beneficial for sellers, since they can avoid foreclosure and satisfy their existing mortgage. Having the help of professionals through this process is quite beneficial and highly recommended for a seamless process.
Need help considering your Jacksonville, NC real estate options? Contact us at firstname.lastname@example.org.