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REAL ESTATE SHORT SALES
1. What is a Short Sale?
Answer: A real estate Short Sale is when a Lender agrees to sell the home at a price that is less then what is owed on the property.
Buying a Short Sale
When you purchase real estate, sometimes it can be purchased as a result of a "Short Sale" which is nothing other then the bank agreeing to sell the home at a price less then the mortgage balance. As a result of the home being sold as a "short sale" people assume that they are getting a great deal. This is not always the case. Although purchasing a short sale is often a great way to purchase real estate, many times due to the real estate market going through a downturn you can purchase a home and still experience a reduction in value. I feel that the key to having success when you purchase a short sale is to make sure that you do research on the market conditions and area of the home. Another important factor is that you are able to hold and carry the property for a minimum of 3-5 years until the real estate market improves.
Short Sale Process
The short sale process can be very confusing because it is not as common as a regular real estate transaction. Typically the short sale process takes longer because you have to deal directly with the bank and gain their approval to sell the home. When a client makes an offer to purchase a real estate short sale they do not have the benefit of getting a quick response like they would from a regular seller.
The short sale process begins with the client having to show that they are eligible for a short sale. All lenders typically require 2 years of tax returns, 2 years of W2's, most recent month of bank statements for all accounts and a hard ship letter. The process of getting approved for a short sale is the exact opposite of what a borrower goes through when they are trying to obtain financing. When a borrower obtains financing they have to show that they can afford to make the mortgage payments. When a seller is trying to get the bank to approve them for a short sale, they have to show the bank that they have made every attempt possible to try and make the payments.
Do's & Don'ts of a Short Sale
What you need to do if you can't make your mortgage payments is take action. You may have time to do a short sale and not have a foreclosure show up on your credit. The key is taking action, speaking to your bank or finding a experienced real estate agent that knows how to do a short sale. You don't want to waste time because your home may go into foreclosure.
Short Sale Options
What do you do when you need to sell your home but you owe more to the bank then what you can sell it for? A real estate Short Sale may be your best option. A real estate short sale is only one of your options. You may have some other options available.
Short Sale - Foreclosure Scams
If you fall behind in your mortgage payments you will receive a lot of mail offering help. Be aware that many of these people are looking to take advantage of someone in a difficult situation.
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