A short sale occurs when a property is sold at a price lower than the amount the homeowner owes on the mortgage and the lender agrees to that amount as a payoff. Lenders often agree to short sales when the borrower cannot continue to make the monthly loan payment, doesn’t have enough money to pay back the full balance of the loan and needs to move out of the property or if the property is worth less than what is owed on it
A short sale benefits each party involved differently. The following list explains the benefits of a short sale for each party involved:
– Homeowner: The homeowner avoids foreclosure and the headaches that come with a foreclosure, allowing a dignified transition into more affordable housing
– Buyer : The buyer purchases a property at a fair market value and avoids having to deal with the risks of buying a foreclosed property
– Seller’s mortgage lender: The lender gets to mitigate its losses by avoiding the process and expenses of foreclosing and reselling the property.
– All other parties: Insurance company, title company, mortgage broker, appraisers, buyer’s agent, and listing agent will all earn a profit from a short sale transaction for rendered services
Homeowners pursue a short sale when they can no longer pay their mortgage, need to move from the property and want to avoid a foreclosure. The impact of a short sale on the homeowner’s credit record may not be as derogatory as a foreclosure.
The success of a short sale relies on the experience and expertise of the specialist handling it. Because of the complex nature of a short sale transaction it is imperative that sellers or buyers work with professionals who have a proven track record in successfully closing short sales. With our agents you get experience, diligence, and relationships that allow for your short sale to close quickly and successfully