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Short Sales have been in the news more and more, alongside the reports on foreclosures. So what exactly is this type of home sale and what would a short sale mean to a homeowner experiencing financial difficulties? Basically, the homeowner sells the house for less than the balance owed on the home, with bank approval.
This approach is an attractive alternative to allowing a home to go to foreclosure. Foreclosures are certain to damage a homeowner's credit. Short sales are still damaging to the homeowner's credit, but experts cite not nearly as much as a fully completed foreclosure. The banks know, statistically, that they lose between 30 and 50 percent on the selling price, once they take possession of the home through foreclosure. For some banks this may mean strategically delaying a foreclosure, in favor of allowing the homeowner to market the home through a real estate broker. For the homeowner, a short sale is a way to get the best price for the home (and for the bank), while working to mitigate the impact on their credit.
A home owner contemplating approach to selling a home should connect with a qualified realtor with expertise in helping homeowners through this process, which includes having established resources for consultations with real estate and tax law specialists --so a homeowner is well informed and reassured that their decision is a good one. There are many different aspects to the short sale process, which can be explained to you by an experienced realtor. There are differences in each short sale, beginning with the type of financing on the home and the reason for the hardship. Hardships can range across a broad spectrum: loss of a job or spouse, divorce, and in the cases of our military --orders for a permanent change of station. The only way to go wrong is to do nothing.
Of course if you are interested in buying a short sale, it is just as important to have an experienced realtor on your side, who knows all about the buyer's side of the process. They can determine if the prospective property is a good option or a complete waste of time. Basically, the best advice for an interested buyer interested is to have an abundance of patience, with the knowledge that their realtor is keeping up to date on what is going on in the transaction & working in their best interest.