Short sales are here to stay.....
Posted 08-24-2011 at 05:30 PM by tanmctee
....for awhile anyway.
So, lets discuss my humble opinion of the good and bad of a short sale.
A Short Sale is when a listing is less than the homeowner owes on the home.
The seller makes no profit on a short sale.
In order to qualify for a short sale a homewoner must have a qualifying hardship:
Loss of job
Significant cut in pay
Divorce
Illness or death in family
Relocation
Natural disaster
Intrease in payment due to interest reset
Increase in property taxes
The benefit to the homeowner is --- if they can reach an agreement with their bank to accept a buyers Short Sale Offer, it is often better on the credit rating; as a result, many home owners are opting to list their home as a short sale.
The benefit to the bank is ---- they save on the expenses involved with foreclosure where they would likely have a larger loss.
If the bank and the home owner are unable to reach an agreement, the short sale may not be approved.
The Short Sale process is more involved and time consuming than a traditional sale and requires patience on behalf of the buyer.
It also requires nerves of steel. A buyer can wait 90 days, 6 months, 9 months only to have the sale fall apart.
This is becoming less frequent because the process is maturing and the banks understand it is mutually beneficial to negotiate with the homeowner rather than foreclose --- some banks are even encouraging homeowners to contact an agent to discuss short sale as an option.
This is a very basic summation of the process.
As a buyer, there are some good values available...you just need to be ready to wait.
As a seller, if you meet the hardhip circumstances and are at risk of losing your home, I encourage you to consider listing your property as a short sale.
Hope this helps with some clarity --- there are so many things to consider when buying or selling a home.....this is just one of them!
So, lets discuss my humble opinion of the good and bad of a short sale.
A Short Sale is when a listing is less than the homeowner owes on the home.
The seller makes no profit on a short sale.
In order to qualify for a short sale a homewoner must have a qualifying hardship:
Loss of job
Significant cut in pay
Divorce
Illness or death in family
Relocation
Natural disaster
Intrease in payment due to interest reset
Increase in property taxes
The benefit to the homeowner is --- if they can reach an agreement with their bank to accept a buyers Short Sale Offer, it is often better on the credit rating; as a result, many home owners are opting to list their home as a short sale.
The benefit to the bank is ---- they save on the expenses involved with foreclosure where they would likely have a larger loss.
If the bank and the home owner are unable to reach an agreement, the short sale may not be approved.
The Short Sale process is more involved and time consuming than a traditional sale and requires patience on behalf of the buyer.
It also requires nerves of steel. A buyer can wait 90 days, 6 months, 9 months only to have the sale fall apart.
This is becoming less frequent because the process is maturing and the banks understand it is mutually beneficial to negotiate with the homeowner rather than foreclose --- some banks are even encouraging homeowners to contact an agent to discuss short sale as an option.
This is a very basic summation of the process.
As a buyer, there are some good values available...you just need to be ready to wait.
As a seller, if you meet the hardhip circumstances and are at risk of losing your home, I encourage you to consider listing your property as a short sale.
Hope this helps with some clarity --- there are so many things to consider when buying or selling a home.....this is just one of them!
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