What Is A Short Sale In Real Estate ?
Short sale is one of the options that people use to avoid foreclosure. However, there are several rules attached to short sale. When a lender wants to avoid foreclosure, they will agree to a short sale. |
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A short sale pays them less than the actual mortgage amount. Even though it makes a lot more sense to foreclose the property, the lender still agrees to a short sale as they are getting the whole amount that the property is sold for.Also, not all properties would be eligible for short sale. The reason why lender would agree for a short sale is they foresee that if they foreclose the property, it is not going to be very beneficial for them. They will still have to find another buyer. Given the market circumstances, this may not be an easy task to achieve.
As a buyer, if you are planning to buy a property on short sale, there could be several drawbacks that you may need to look out for. First of all take some legal advice from a real estate lawyer on the background of the property. Also, see what the tax liabilities are through a short sale. It may not always be profitable for you to buy property on a short sale. In addition, try getting some background details on why the lender agreed to a short sale. Hire an evaluator and get the property valued. This will give you an idea as to what the property is worth and how much you should offer the client.
Remember, a short sale is a long drawn process. Once you make an offer and the buyer accepts it, you will have to make a written agreement on the sale. This agreement along with other documents has to be forwarded to the lender. The documents are then checked by the lender, and he is satisfied, he will give the go ahead for the sale to take place. Usually it takes the lender around 180 days to review the documents.
However, given the market conditions even real estate agents agree that most of the properties that they buy or sell these days are mostly short sale ones.
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What Is A Short Sale In Real Estate ?
